The Opening Bell: Where currencies start on Thursday, August 24, 2017

By Dan Bell

The NZDUSD opens at 0.7231 (mid-rate) this morning.

The NZD is the worst performing of the G10 currencies, the currency was hit hard yesterday and has continued to struggle overnight. The catalyst for the fall was yesterday’s pre-election fiscal update where forecasts for both growth and budget surpluses were lowered.

Weak equity markets as well as a dip in US interest rates has seen investors flock to safe-havens with the JPY and to a lesser extent the CHF our performing.

The EUR has also performed well overnight after Euro-zone manufacturing data printed ahead of expectations with both the flash Composite Output Index along with the flash Purchasing Managers' Index both climbing in August. The Composite Output Index rose to a two month high of 55.8 following July’s 55.7 result, while the flash Purchasing Managers' Index also posted a two month high rising to 57.4 up from 56.6 in July.

US new home sales for the month of July unexpectedly plummeted, down 9.4% to an annual rate of 571k following an upwardly revised June result of 630k. The sharp fall came as a surprise to economists who had forecast the sales to edge up to 610k from the previously reported 610k in June.

The U.S. Energy Information Administration (EIA) reported a 3.3million barrel fall in crude oil inventories for the week ending 18th August, the fall was in line with expectations.

This morning’s trade surplus is expected to fall by $200 million in July after posting a $242 million surplus in June, the data will be released at 10:45am.

Global equity markets are mixed - Dow -0.32%, S&P 500 -0.36%, FTSE +0.01%, DAX -0.45%, CAC -0.32%, Nikkei +0.26%, Shanghai -0.08%.

Gold prices has edged higher, up 0.3% trading at $1,288 an ounce .WTI Crude Oil prices continue to push higher, up 1.6% trading at $48.39 a barrel.

Current indicative rates:

NZDUSD       0.7231      -0.6%
NZDEUR       0.6118      -1.2%
NZDGBP       0.5647      -0.5%
NZDJPY         78.79       -1.1%
NZDAUD       0.9145      -0.7%
NZDCAD       0.9071      -0.8%
GBPNZD       1.7708       0.5%

Upcoming Data releases (NZST):

  • 10:45 Trade Balance

 

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

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