The Opening Bell: Where currencies start on Tuesday, August 29, 2017

By Dan Bell

The NZDUSD opens at 0.7259 (mid-rate) this morning.

The NZD has outperformed all but the AUD in the last 24 hours. Investors looked to hedge against geopolitical risks and Hurricane Harvey. There was broad USD selling and Gold rallied $21. EURUSD traded to 1.1984 just shy of the psychological 1.2000 resistance level.

The annual growth rate of the broad monetary aggregate M3 for the Euro-area decreased to 4.5% in July 2017, from 5.0% in June. The annual growth rate of the narrower aggregate M1, which includes currency in circulation and overnight deposits, decreased to 9.1% in July, from 9.7% in June. The annual growth rate of adjusted loans to households stood at 2.6% in July, unchanged from the previous month.

The U.S. goods trade deficit increased in July as exports fell, suggesting that trade would make a modest contribution to economic growth in the third quarter. The goods trade gap increased 1.78% to $65.1 billion last month. Exports declined 1.3%, weighed down by an 8.0% tumble in shipments of motor vehicles. There were also decreases in exports of consumer goods last month.

Despite the wider deficit, economists expect trade to be positive to growth in the third quarter. U.S. exports are being helped by a rebound in global growth and a weaker dollar.

Global equity markets are mainly lower: Dow -0.11%, S&P 500 -0.04%, FTSE -0.08%, DAX -0.37%, CAC -0.48%, Nikkei -0.01%, Shanghai +0.93%.

Gold prices have rallied strongly up $21 or 1.6% trading at $1,310 an ounce. WTI Crude Oil prices are sharply lower, down 2.3% trading at $46.69 a barrel.

Current indicative rates:

NZDUSD       0.7259       0.4%
NZDEUR       0.6059       0.2%
NZDGBP       0.5609       0.4%
NZDJPY         79.18        0.2%
NZDAUD       0.9103      -0.4%
NZDCAD       0.9068       0.5%
GBPNZD       1.7820      -0.4%

Upcoming Data releases (NZST):

  • CNY – Bank Holiday

 

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

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