This will be the last HIFX Morning Update for 2016. HIFX wishes you all a safe and relaxing Christmas and a prosperous New Year!
The NZDUSD opens at 0.7037 (mid-rate) this morning.
The Federal Reserve hiked Interest rates by 25 basis points as expected and the Fed Chair Yellen announced a further 3 hikes for 2017 - one more than the market was predicting.
The Kiwi was immediately sold off and begins today down 2.5% against the USD.
For the week the NZD is down 1.4% against the USD but up 1% against the JPY as the USD/JPY continues higher from 100 in Sept to 118 today.
The Bank of England kept its key interest rate at a record low and noted that the pound’s recent appreciation may mean a slower pickup in inflation next year. Emphasizing its balancing act between managing inflation and growth, the MPC also said the economy will cool in 2017 as consumer spending weakens and Brexit uncertainty takes a toll.
Activity picked up in December, according to the firms responding to this month’s U.S. Manufacturing Business Outlook Survey. The index increased from a reading of 7.6 in November to 21.5 this month.
In the week ending December 10, the advance figure for seasonally adjusted initial claims was 254,000, a decrease of 4,000 from the previous week's unrevised level of 258,000. This marks 93 consecutive weeks of initial claims below 300,000, the longest streak since 1970.
Global equity markets are higher with China as the exception - Dow +0.61%, S&P 500 +0.66%, FTSE +0.72%, DAX 1.08%, CAC 1.05%, Nikkei +0.10%, Shanghai -0.73%.
Gold prices have dropped 2.9% currently trading at $1,128 an ounce. WTI Crude Oil is down 1.7% from yesterday currently trading at $51.13 a barrel.
Current indicative rates:
NZDUSD 0.7037 -2.5%
NZDEUR 0.6757 -0.3%
NZDGBP 0.5658 -0.5%
NZDJPY 83.05 -0.1%
NZDAUD 0.9558 -0.6%
NZDCAD 0.9396 1.0%
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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