The Opening Bell: Where currencies start on Friday, September 22, 2017

By Dan Bell

The NZDUSD opens at 0.7312 (mid-rate) this morning.

Commodity linked currencies including the NZD have underperformed over the past 24hrs with the AUD suffering the sharpest fall on a combination of falling metal prices and confirmation from RBA Governor Lowe that interest rates in Australia will remain on hold for some time. Gov Lowe went on to state that the tightening actions of other major central banks would not influence the RBA’s decisions or make it more likely for the bank to tighten policy. The AUD fell sharply on the back of these comments.

Yesterday the BOJ voted 8-1 in favour of maintaining its current monetary stimulus and at the same time retained a -0.1% interest rate on current accounts that financial institutions maintain at the bank.

There were better than expected economic data release out of the US overnight with first-time claims for U.S. unemployment benefits unexpectedly decreasing for the week ending 16/09, while Federal Reserve Bank of Philadelphia reported an increase in manufacturing activity, with the index rising to 23.8 in September up from 18.9 in August.

The EUR also benefitted from upbeat economic data with consumer confidence within the Euro-zone increasing to -1, its highest reading since 2001.

Following reports that UK Prime Minister Theresa May has the full backing of her cabinet to make an  “open and generous” offer of €20bn during the Brexit transition period, on the condition that the UK will retain access to the single market and some form of customs union which will allow the UK to strike its own trade deals during the 2 year transition period, the GBP surged higher and has been the best performing of the G10 currencies.

Global equity markets remain mixed - Dow -0.15%, S&P 500 -0.24%, FTSE -0.11%, DAX +0.25%, CAC +0.49%, Nikkei +0.18%, Shanghai -0.24%.

Gold prices are down 0.7% trading at $1,391 an ounce. WTI Crude Oil prices have edged higher up 0.4% trading at $50.62 a barrel.

Current indicative rates:

NZDUSD    0.7312    -0.5%
NZDEUR    0.6127    -0.9%
NZDGBP    0.5386    -1.2%
NZDJPY      82.28     -0.4%
NZDAUD    0.9217     0.5%
NZDCAD    0.9021    -0.5%
GBPNZD    1.8566     1.2%


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

Daily exchange rates

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Source: RBNZ

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