The Opening Bell: Where currencies start on Tuesday, September 19, 2017

By Dan Bell

The NZDUSD opens at 0.7252 (mid-rate) this morning.

After trading to a session high of 0.7340 against the USD yesterday afternoon the NZD opens this morning testing 0.7250 support. The USD strengthened against all its rivals overnight as investors positioned their books ahead of Thursdays FOMC statement.

Although the Federal Reserve are expected to leave interest rates unchanged at this week’s meeting, the anticipated announcement of the start of balance sheet normalization and the likelihood of the Fed keeping the option of a December rate hike alive has been the catalyst for last night’s USD move. The US 10-year Treasury rate continues to push higher and the latest polls are pricing in a 56% chance that the Fed will hike at the December meeting.

Euro-zone inflation rose in line with expectations, hitting a four month high in August. The Eurostat report showed consumer prices increases by 1.5% y/y in August following a 1.3% increase in July.

This morning’s Westpac consumer sentiment data release is likely to have little effect on the currency, while this afternoon’s RBA monetary policy meeting minutes should be the main driver for the NZDAUD cross rate.

Global equity markets have turned positive – Dow +0.3%, S&P 500 +0.05%, FTSE +0.52%, DAX +0.32%, CAC Closed, Nikkei +0.52%, Shanghai +0.28%.

Gold prices are down 1.5% trading at $1,306 an ounce. .WTI Crude Oil prices have pushed higher, currently up 0.7% at $50.02 a barrel.

Current indicative rates:

NZDUSD    0.7252    -0.4%
NZDEUR    0.6075    -0.4%
NZDGBP    0.5377     0.2%
NZDJPY      80.92      0.0%
NZDAUD    0.9121     0.2%
NZDCAD    0.8927     0.5%
GBPNZD    1.8597    -0.2%

Upcoming Data releases (NZST):

  • 10:00 Westpac Consumer Sentiment
  • 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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