The Opening Bell: Where currencies start on Wednesday, July 12, 2017

By Dan Bell

The NZDUSD opens at 0.7225 (mid-rate) this morning.

The NZD has been the weakest performer of the G10 currencies over the past 24hrs. The NZDUSD looked to be in danger of breaking back below 0.7200 before political headlines surrounding Donald Trump Jr and his meetings with the Russian attorney saw the USD sell-off.

Earlier this morning Donald Trump Jr released a chain of emails that led to his meeting with a Russian lawyer. The emails between Trump Jr. and publicist Rob Goldstone led to a meeting between Trump Jr and Russian lawyer Natalia Veselnitskaya. Veselnitskaya it was suggested was willing to provide information that would “incriminate” Democratic presidential nominee Hillary Clinton. Trump Jr in a statement has said “Veselnitskaya had no information to provide and wanted to talk about adoption policy and the Magnitsky Act.”

Better than expected NAB Business Confidence out of Australia has seen the NZDAUD cross rate fall 1%. The index recorded a score of +9 up from May’s +8 reading. Business conditions also picked up surging to +15 from +11 in the previous month.

The day ahead is once again light on data with investors likely to wait for Fed Chair Yellen’s testimony before the US the House Financial Services Committee before adding to their positions. In the early hours of tomorrow morning the BOC are expected to hike interest rates, with the market fully pricing in the hike there is substantial downside risk for the Cad should the BOC decide to sit on their hands.

Global equity markets are mixed – Dow +0.1, S&P 500 -0.073, FTSE -0.55%, DAX -0.07%, CAC -0.48%, Nikkei +0.67%, Shanghai -0.30%

Gold prices have edged higher, up 0.2% trading at $1,216 an ounce. WTI Crude Oil prices have continued to push higher up 1.2% trading at $45.03 a barrel.

Current indicative rates:

NZDUSD       0.7225      -0.7%
NZDEUR       0.6302      -1.2%
NZDGBP       0.5625      -0.5%
NZDJPY         82.27       -0.8%
NZDAUD       0.9467      -1.0%
NZDCAD       0.9341      -0.3%
GBPNZD       1.7777       0.5%


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

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