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The Opening Bell: Where currencies start on Friday, June 17, 2016

Currencies
The Opening Bell: Where currencies start on Friday, June 17, 2016

By Dan Bell

The NZDUSD opens at 0.7039 (mid-rate) this morning.

The Kiwi returns to yesterday’s opening level after trading a 129 point range yesterday. It peaked mid morning at 0.7093 then traded lower throughout the session to a 0.6964 low at 2am overnight before recovering. The biggest move was seen in the JPY which benefited from safe haven buying as Brexit fears continue.

U.S. Consumer Price Index (CPI) increased 0.2% in May on a seasonally adjusted basis. The food index declined in May, but the indexes for energy and all items less food and energy rose.

Firms responding to the U.S. Manufacturing Business Outlook Survey reported little growth this month. Though the indicator for general activity was positive in June, other broad indicators continued to reflect general weakness in business conditions. The indicators for both employment and work hours remained negative. Forecasts of future activity weakened from last month but continued to suggest that manufacturers expect growth over the next six months. The diffusion index for current activity rose almost 7 points, to 4.7, and returned to positive territory this month after two consecutive negative readings.

Initial U.S. jobless claims rose by 13,000 to 277,000 in mid-June, but the increase is likely tied to seasonal quirks that could unwind in the next few weeks. The expectation was for 267k worse than the 264k from the previous week.

The U.S. current-account deficit—a net measure of transactions between the United States and the rest of the world in goods, services, primary income, and secondary income—increased to $124.7 billion (preliminary) in the first quarter of 2016 from $113.4 billion (revised) in the fourth quarter of 2015.

Global equity markets are down except North & South America : Dow +0.43%, S&P 500 +0.12%, FTSE -0.27%, DAX -0.59%, CAC -0.45%, Nikkei -3.05%, Shanghai -0.5%.

Gold prices peaked at 1315 overnight, currently trading down 0.3% at $1,287 an ounce, WTI Crude Oil is down 3.2% at $46.24 a barrel

Current indicative rates:

NZDUSD       0.7039      0.0%
NZDEUR       0.6266      0.2%
NZDGBP       0.4954     -0.2%
NZDJPY         73.44      -1.6%
NZDAUD       0.9551      0.5%
NZDCAD       0.9126      0.4%

Upcoming Data releases (NZST):

  • 10:30 - Business NZ Manufacturing Index

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

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