The Opening Bell: Where currencies start on Tuesday, December 5, 2017

By Dan Bell

The NZDUSD opens at 0.6844 (mid-rate) this morning.

The NZD has struggled overnight, losing ground against all its rivals. This afternoon RBNZ acting Governor Grant Spencer is due to give a speech titled ‘low inflation and its implications for monetary policy,’ and is widely expected to reiterate ‘monetary policy will remain accommodative for a considerable period’. Investors will also be very mindful of tonight’s Global Dairy Trade (GDT) auction. The price index has suffered four consecutive falls with the last auction, which was held on Nov 21st, down 3.4% following 3.5%, 1% and 2.4% decreases at the three previous auctions.

Overnight US Commerce department reported factory orders edged lower in October, down 0.1% following September’s 1.7% spike in orders. The fall was not as great as expected, with economists forecasting orders to fall by 0.4%.

The British pound continues to be the most actively traded currency with Brexit negotiations continuing to dominate the headlines. The GBP surged higher overnight on reports that an agreement between Britain and the EU was close before news broke that Northern Ireland’s Democratic Unionist party, which provides the UK prime minister with her majority in parliament, objected to the proposed solution for the Irish border.

Global equity markets remain mixed – Dow +087%, S&P 500 +0.52%, FTSE +0.53%, DAX +1.53%, CAC +1.36%, Nikkei -0.49%, Shanghai -0.24%.

Gold prices are down 0.7% trading at $1,273 an ounce. WTI Crude Oil prices are down 1%, over the past 24 hours, currently trading at $57.79 a barrel.

Current indicative rates:

NZDUSD    0.6844     -0.4%
NZDEUR    0.5774     -0.3%
NZDGBP    0.5084     -0.5%
NZDJPY      77.19      -0.5%
NZDAUD    0.9011     -0.3%
NZDCAD    0.8691     -0.4%
GBPNZD    1.9671      0.5%

Upcoming Data releases (NZST):

  • 13:00 – ANZ Commodity Prices m/m
  • 13:15 – RBNZ Gov Spencer Speaks
  • 16:30 – RBA Rate Statement

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

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