The Opening Bell: Where currencies start on Monday, July 17, 2017

By Dan Bell

The NZDUSD opens at 0.7345 (mid-rate) this morning.

The USD was heavily sold on Friday losing ground against all its rivals including the NZD, following another series of disappointing economic data releases.

A lack of inflation and an unexpected fall in retail sales has raised question marks over whether the Fed will be in a position to hike rates and reduce its balance sheet later this year.

Consumer prices in the US for the month of June, which had been expected to edge higher, after declining by -0.1% in May, came in flat, while retail sales for the same period fell for the second consecutive month. Economists had expected both data releases to edge higher.

Industrial production in the US printed slightly ahead of expectations, with the Fed report showing a 0.4% (exp 0.3%) increase in June, but any hopes of a USD recovery were dashed when the University of Michigan preliminary consumer sentiment report showed the index fell to 93.1 in July after a final reading of 95.1 in June. The report had been expected to show the index edging down to 95.0.

The domestic highlight for the NZD this week will be tomorrows quarterly inflation report, while the key international data releases will be the monetary policy statements from the BOJ and the ECB due for release on Thursday afternoon and evening respectively.

Global equity markets closed out the week mixed - Dow +0.39%, S&P 500 +0.46%, FTSE -0.47%, DAX +0.08%, CAC 0.00%, Nikkei +0.09%, Shanghai +0.13%.

Gold prices were up 3% over the course of the week closing on Friday at $1,228 an ounce .WTI Crude Oil continued to push higher on Friday, increasing by 5% over the week to close on Friday at $46.54 a barrel.

Current indicative rates:

NZDUSD       0.7345       0.3%
NZDEUR       0.6402      -0.2%
NZDGBP       0.5602      -0.9%
NZDJPY         82.65       -0.3%
NZDAUD       0.9381      -0.9%
NZDCAD       0.9291      -0.3%
GBPNZD       1.7850       0.9%

Upcoming Data releases (NZST):

  • 14:00 - CNY GDP
  • 14:00 - CNY Industrial Production y/y

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

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