The Opening Bell: Where currencies start on Tuesday, June 20, 2017

By Dan Bell

The NZDUSD opens at 0.7228 (mid-rate) this morning.

Overnight, hawkish comments from New York Fed President William Dudley has led to USD rally. With very little in the way of economic data releases investors focused on Fed President Dudley’s address to the North Country Chamber of Commerce, in Plattsburgh, where Dudley reiterated Yellen’s comments from last Thursday. Dudley stated “We are pretty close to full employment. Inflation is a little lower than what we would like, but we think that if the labour market continues to tighten, wages will gradually pick up and with that, inflation will gradually get back to 2 percent.” The USD immediately strengthened against all its rivals following Dudley’s comments. Later this morning Chicago Federal Reserve President Charles Evans is expected to continue talk up the economy when speaking at the New York University Money Marketeers event.

Yesterday U.K. Brexit Secretary David Davis, met with Chief EU negotiator Michael Barnier in Brussels to begin Brexit negotiations. The UK have until 29th March 2019 to negotiate the terms of their departure from the European Union.

This afternoon the release of the RBA monetary policy meeting minutes should dictate direction for the NZDAUD cross rate while overnight tonight, the latest global dairy trade auction will be the main NZD driver ahead of Thursday’s RBNZ rate statement.

Global equity markets have had a positive start to the week – Dow +0.54%, S&P 500 +0.71%, FTSE +0.81%, DAX +1.07%, CAC +0.90%, Nikkei +0.62%, Shanghai +0.68%.

Gold prices have pulled back currently down 0.6% at $1,245 an ounce. .WTI Crude Oil prices have started the week on the back foot, currently down 0.7% at $44.44 a barrel.

Current indicative rates:

NZDUSD       0.7228      -0.4%
NZDEUR       0.6483       0.2%
NZDGBP       0.5677       0.1%
NZDJPY         80.61        0.2%
NZDAUD       0.9517       0.0%
NZDCAD       0.9556      -0.3%
GBPNZD       1.7614      -0.1%

Upcoming Data releases (NZST):

  • 11:00 – FOMC Member Evans Speaks
  • 13:30 – RBA Monetary Policy Meeting Minutes

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

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