With little newsflow, currency movements have been modest, with the USD fairly flat following yesterday's modest fall.
All eyes remain on Trump as he seeks to employ key staff and sets his policy agenda. While we await his key appointments, he released a video outlining executive action he can take on “day one”. These include a withdrawal from the TPP on trade and reducing regulations on energy production. He re-emphasised his “putting America first” principle.
The equity market continues to support Trump's actions, with new milestones reached for the Dow Jones index (19000) and the S&P500 (2200), although as I write the market is back to flat for the session.
After yesterday's strong run, oil prices have slipped a little, even as more OPEC oil ministers have come out suggesting that talks have been constructive on agreeing to production cuts at next week's meeting.
The NZD sits around 0.7050 and has traded in a fairly tight 50-pip range since yesterday morning. After last week's selldown, the NZD sits slightly under-valued compared to our short term fair value estimate of 0.7170. There are only minor releases scheduled on the data calendar this week and with Thursday’s US Thanksgiving holiday, the currency could remain in a tight trading range over the rest of the week.
The AUD has performed slightly better, reaching 0.74, helping to push NZD/AUD down to 0.9530.
JPY is trading around the 111 mark. USD/JPY fell to a low of 110.27 in the aftermath of another major earthquake in the Fukushima region, but as news flowed of little damage to the nuclear facilities in the region it managed to recover back to pre-earthquake levels.
Elsewhere, EUR is flat at 1.0630 and GBP has lost a little ground following its recent outperformance and sits at 1.2410.
The day ahead sees a series of Markit PMI releases in Europe and the US, while in the US durable goods orders and new home sales might hold interest for some.
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