The Opening Bell: Where currencies start on Thursday, February 19, 2015

By Dan Bell

The NZDUSD opens at 0.7526 (mid-rate) this morning.

The NZDUSD traded sideways ahead of this morning’s FOMC meeting minutes, the key points of which are listed below.

• Many officials in January thought 'premature' rate hikes might damp recovery
   
• Many thought deterioration overseas could pose risk to US economic outlook
   
• Actions by number of foreign central banks likely strengthen outlook abroad
   
• Some officials in January worried about overreaction to dropping 'patient' pledge
   
• Several participants saw continuing weakness in core inflation as concern
   
• Officials generally anticipated inflation would rise gradually toward 2% target
   
• Strong dollar expected to be 'persistent source of restraint' on exports
   
• Tepid nominal wage growth, if continued, could be significant spending restraint
   
• Several officials noted signs of layoffs in oil and gas industries
   
• Persistently low energy prices might prompt larger retrenchment in industry jobs
   
• Developments over intermeeting period reduced overseas risks to US
   
• China noted as restraining factor in economic expansion of a number of countries
   
• Debated decline in nominal long-term interest rates and its implications
   
• Discussed tradeoffs between risks of raising rates later, sooner
   
• Staff saw valuation pressures in corporate debt markets, but some easing
   
• Staff saw valuation pressures building in commercial real estate sector
   
• Staff saw 'limited' effects on large banks from oil prices, foreign exchange developments
   
• Officials approved 'minor update' to statement of longer-run goals
   
• Tarullo abstained from vote reaffirming statement of fed's long-run goals
   
• Tarullo doesn't believe statement reflects consensus as to advance public understanding
   
• Lacker dissented on votes reauthorizing foreign currency operations
   
• Lacker opposes foreign currency intervention by the fed

The NZDUSD is trading up half a cent at 0.7575 in reaction to this release.

Global equity markets remain mixed - Dow -0.26%, Nikkei +1.18%, Shanghai Closed, FTSE +0. 00% DAX +0.60%, CAC +0.95%.

Gold prices are again lower currently trading at  $1200 (-$8), Oil prices are trading down 2.8% at  $52.50 a barrel.

The current indicative mid-rates are:

NZDUSD           0.7526
NZDEUR           0.6635
NZDGBP           0.4878
NZDJPY              89.79
NZDAUD           0.9672
NZDCAD           0.9365

Domestic data releases today:
10:45 - PPI Input q/q
            - PPI Output q/q

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