The Opening Bell: Where currencies start on Thursday, October 26, 2017

By Dan Bell

The NZDUSD opens at 0.6869 (mid-rate) this morning.

The NZD remains under pressure against the majors but has managed to rebound against both the CAD and the AUD over the past 24hrs.

The AUD fell sharply after yesterday’s inflation report undershot market expectations. Economists had forecast Q3 CPI to increase by 0.8% with the trimmed mean tipped to remain unchanged at 0.5%. On an annual basis consumer prices advanced 1.8 %, unchanged from Q2 but missing forecasts for 2.0%, while annual trimmed mean is running at 1.8% again shy of the forecast 2% rise. The result has seen the AUD plunge against all its counterparts.

Stronger than expected US data has failed to strengthen the USD as concerns around whether Trump can gain enough support for his tax reform package mount. This morning the U.S. Department of Commerce reported that durable goods orders rose by 2.2% in September well ahead of the forecast 1% increase, while for the same period new home sales confounded economists who had forecast sales to dip from 560k in August to 555k in September when sales surged by 18.9% to an annual rate of 667k.

The GBP continues to outperform with last night’s better than expected Q3 GDP fuelling expectations of a rate hike at next week’s monetary policy meeting. The Office for National Statistics reported gross domestic product grew by 0.4% during the September quarter, ahead of the predicted 0.3% increase. The Pound has been the performer of the G10 currencies as investors price in a now expected interest rate hike.

Global equity markets are broadly lower- Dow -0.72%, S&P 500 -0.78%, FTSE -1.05%, DAX -0.46%, CAC -0.37%, Nikkei -0.45%, Shanghai +0.26%.

Gold prices are little changed, down 0.3% trading at $1,276 an ounce. WTI Crude Oil prices have continued to push higher, up 1.0% overnight currently sitting at $52.39 a barrel.

Current indicative rates:

NZDUSD    0.6869     -0.3%
NZDEUR    0.5816     -0.7%
NZDGBP    0.5182     -1.3%
NZDJPY      78.09      -0.4%
NZDAUD    0.8928      0.8%
NZDCAD    0.8804      0.8%
GBPNZD    1.9298      1.3%

Upcoming Data releases (NZST):

  • 10:45 – Trade Balance

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

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