The NZDUSD opens at 0.7157 (mid-rate) this morning.
The U.S. dollar strengthened against all its major rivals after Federal Reserve Chairwoman Janet Yellen left the door wide open for a rate hike at next month’s monetary policy meeting. Yellen stated that “rate hikes will be evaluated at upcoming meetings” and that “waiting too long to raise rates would be unwise”. The Dollar Index (DXY) which had been under pressure following the sudden resignation of the US national security adviser Mike Flynn, is currently up 0.35%. Flynn’s resignation came after the Justice Department warned the White House that Flynn had misled them concerning his contacts with Russia, and that his close contact with the Russian ambassador left him vulnerable to blackmail.
Overnight UK CPI rose to 1.8% in January up from 1.6% in December. Although inflation now sits at its highest level since June 2014 the result fell short of economist’s estimates of a 1.9% reading. The weak GBP was the main contributor to the inflation increase pushing up fuel and food prices.
Political uncertainty in the Euro-zone has led to a sharp fall in Germany's economic sentiment index with the ZEW Indicator declining to 10.4 in February from 16.6 in January. Economists had expected the index to edge down to 15.
Overnight, tonight we have a multitude of US data releases including further testimony from Janet Yellen.
Global equity markets are mixed- Dow +0.14%, S&P 500 -0.02%, FTSE -0.14%, DAX -0.02%, CAC +0.16%, Nikkei -1.13%, Shanghai +0.03%.
Gold prices are unchanged trading at $1,224 an ounce, WTI Crude Oil has risen slightly currently up 0.7% trading at $52.78 a barrel.
Current indicative rates:
NZDUSD 0.7157 -0.3%
NZDEUR 0.6769 0.1%
NZDGBP 0.5739 0.1%
NZDJPY 81.81 0.3%
NZDAUD 0.9361 -0.2%
NZDCAD 0.9352 -0.3%
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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