The NZDUSD opens at 0.6895 (mid-rate) this morning.
The NZD continues to underperform on broad USD strength. The USD has clawed back some of its recent losses against both the JPY and the EUR on anticipation that this morning’s tax reform announcement could boost the Dollar. The dollar index (DXY) is currently up 0.5%.
This morning White House Treasury Secretary Steven Mnuchin announced what the Trump administration is calling “the biggest tax cuts in history”. The plan is to slash US corporate tax rates from 35% to 15% as well as reducing individual income tax brackets from seven to three (10%, 25%, 35%). The plan if passed will also eliminate inheritance taxes and include a one-time tax on corporate profits overseas that would allow companies to repatriate funds to the United States. Initial reaction to the reforms is that it is a tax cut for the wealthy that will benefit Wall Street and Trump.
Overnight, tonight investors will look to the ECB Minimum Bid Rate announcement as well as US durable goods and weekly employment reports for further direction.
Global equity markets continue to strengthen - Dow +0.17%, S&P 500 +0.23%, FTSE +0.18%, DAX +0.05%, CAC +0.19%, Nikkei +1.10%, Shanghai +0.20%.
Gold prices are holding steady currently trading at $1,265 an ounce. WTI Crude Oil is slightly higher up 0.5% overnight currently trading at $49.75.
Current indicative rates:
NZDUSD 0.6895 -0.7%
NZDEUR 0.6320 -0.6%
NZDGBP 0.5362 -1.1%
NZDJPY 76.72 -0.7%
NZDAUD 0.9221 0.0%
NZDCAD 0.9382 -0.4%
GBPNZD 1.8649 1.1%
Upcoming Data releases (NZST):
- Tentative - BOJ Monetary Policy Statement
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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