The Opening Bell: Where currencies start on Friday, February 17, 2017

By Dan Bell

The NZDUSD opens at 0.7229 (mid-rate) this morning.

The NZD had a quiet night trading only a 37 point (0.5%) range against the USD, about half what we would normally expect. The Kiwi opens fractionally higher against the USD & AUD, steady with GBP and CAD, but was outperformed by the EUR and Yen

Yesterday’s Australian jobs data beat expectations again. Employment rose by 13,500 in seasonally adjusted terms, and the unemployment rate fell to 5.7% from 5.8% in December, courtesy of a drop in labour market participation to 64.6%.

The European Central Bank (ECB) released an account of its Policy Meeting overnight and its account of the global situation. The ECB gave mention to the strong repricing in the US Treasury market observed immediately after the US presidential election, and that market participants had recently seemed to be adopting a more cautious attitude towards the US policy outlook for 2017, reflecting, a possible moderation in US economic growth.

In its view, the ECB said market-based expectations of further changes in the US Federal funds rate had been broadly stable since December. The improvement in global manufacturing confidence in December 2016, led by the United States and China, had contributed to a benign environment for global financial markets at the turn of the year.

The ECB’s view of the global economy stated that activity indicators pointed to a rebound in the second half of 2016.  For the euro area, the economic recovery was firming, mainly driven by private consumption and investment, including construction investment, on the back of sustained employment gains, higher labour income and low interest rates.

Data releases were light overnight highlighted by the U.S. seasonally adjusted initial claims that came in at 239k, an increase of 5k from the previous week's unrevised level of 234k

Global equity markets are mixed: Dow -0.09%, S&P 500 -0.34%, FTSE -0.34%, DAX -0.31%, CAC -0.52%, Nikkei -0.47%, Shanghai +0.52%.

Gold prices have edged higher again up 0.6% trading at $1,238 an ounce, WTI Crude Oil is up 0.8% trading at $53.46 a barrel.

Current indicative rates:

NZDUSD       0.7229      0.3%     
NZDEUR       0.6781     -0.4%      
NZDGBP       0.5793      0.0%      
NZDJPY         81.92      -0.5%
NZDAUD       0.9390      0.3%   
NZDCAD       0.9432      0.0%   

Upcoming Data releases (NZST):

  • 10:30am - Business NZ Manufacturing Index
  • 10:45am - Retail Sales q/q
  • 10:45am - Core Retail Sales q/q

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

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