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The Opening Bell: Where currencies start on Monday, December 5, 2016

Currencies
The Opening Bell: Where currencies start on Monday, December 5, 2016

By Dan Bell

The NZDUSD opens at 0.7125 (mid-rate) this morning.

Broad USD weakness following Friday’s payroll report has helped push the NZD back above 71 US cents. Although the report showed that jobs increased by more than expected (178k jobs Vs expected 170k jobs) and unemployment fell by 0.3% to a nine year low of 4.6%, in was the lack of wage price inflation that hurt the USD. Economists had expected to see average hourly earnings increase by 1.1% in November and were forecasting wage growth to hit 2.8% y/y, so it was somewhat of a shock to the market when the report showed average hourly earnings fell by 0.1% leaving wage growth at 2.5%y/y.

The British Pound was the best performing currency on Friday after the UK construction sector continued to rebound. The November Purchasing Managers' Index unexpectedly rose to 52.8 from 52.6 in October, economists had expected the index to fall to 52.2.

Today investors will be following the critical Italian constitutional referendum, with current Prime Minister  Matteo Renzi threatening to resign on a “No vote”. Earlier this morning the Euro-zone received a boost after the Austrian far-right candidate Norbert Hofer conceded defeat to the pro-Europe Green party leader Alexander Van der Bellen.

Global equity markets softened on Friday - Dow -0.11%, S&P 500 +0.04%, FTSE -0.33%, DAX -0.20%, CAC -0.70%, Nikkei -0.47%, Shanghai -0.90%.

Gold prices gained 1.0% on Friday to close out the week at $1,176 an ounce WTI Crude Oil  spiked 12% over the course of the week  closing on Friday at $51.68 a barrel.

Current indicative rates:

NZDUSD       0.7125       0.5%
NZDEUR       0.6685      -0.1%
NZDGBP       0.5610      -1.3%
NZDJPY         80.87       -0.1%
NZDAUD       0.9565      -0.2%
NZDCAD       0.9479      -0.3%

Upcoming Data releases (NZST):

  • 13:00 - ANZ Commodity Prices m/m

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

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Source: CoinDesk

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