The Opening Bell: Where currencies start on Thursday, June 29, 2017

By Dan Bell

The NZDUSD opens at 0.7309 (mid-rate) this morning.

With Central Bank press releases taking centre stage the GBP has been the strongest performing currency over the past 24hrs, after Bank of England (BOE) Governor Mark Carney suggested interest rates could rise. Mr Carney speaking at the European Central Bank conference in Sintra, Portugal, said “some removal of monetary stimulus is likely to become necessary if the trade-off facing the Monetary Policy Committee (MPC) continues to lessen and the policy decision accordingly becomes more conventional.” The GBP spiked higher following the remark. During their last monetary policy meeting on the 15th June the MPC voted 5-3 in favour of keeping interest rates unchanged at record lows. The BOE is the third major Central Bank following the Bank of Canada (BOC) and the European Central Bank (ECB) to hint that monetary policy tightening is not far away.

US overnight economic data releases cancelled each other out, with pending home sales decreasing for the third consecutive month in May. The index declined by 0.8% to 108.5 in May from a downwardly revised 109.4 in April. While during the same period the US trade deficit decreased by $1.2B to 65.9B down from 67.1B in April.

Following three straight months in decline UK house prices increased in June, with the Nationwide Building Society reporting house prices increased by 1.1% m/m in June after edging down 0.2% in May.

Global equity markets remain mixed – Dow +0.69%, S&P 500 +0.84%, FTSE -0.63%, DAX -0.19%, CAC -0.11%, Nikkei -0.47%, Shanghai -0.56%.

Gold prices are unchanged trading at $1,249 an ounce. .WTI Crude Oil has continued to push higher, currently up 1.5% at $44.75 a barrel.

Current indicative rates:

NZDUSD       0.7309       0.5%
NZDEUR       0.6418       0.1%
NZDGBP       0.5651      -0.4%
NZDJPY         82.01        0.5%
NZDAUD       0.9565      -0.2%
NZDCAD       0.9522      -0.6%
GBPNZD       1.7695       0.4%


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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »

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