The Opening Bell: Where currencies start on Tuesday, September 26, 2017

By Dan Bell

The NZDUSD opens at 0.7269 (mid-rate) this morning.

Growing geopolitical tensions between North Korea and the US has seen the JPY outperform as investors flock to safe-havens.

The NZD and the EUR have been the worst performing of the G10 currencies after both the NZ and German weekend’s elections failed to produce an outright winner. The NZDUSD which opened yesterday at 0.7329 has bounced this morning off the 0.7250 support level.

German Chancellor Angela Merkel's centre-right CDU-party will now have to form a new coalition government after her current coalition partner, the social democratic SPD, ruled out of forming any alliance, saying they will now become an opposition party. The EURUSD is currently down 1% from yesterday’s open.

Overnight the only economic data release of note came in the form of German business sentiment which unexpectedly declined for the second consecutive month in September. The Ifo Institute report showed the business confidence index fell to 115.2 in September, following August’s pull back to 115.9. The index had been expected to edge higher.

Today the release of New Zealand’s trade balance followed by the ANZ business confidence report are likely to have little effect on the currency with investors looking ahead to Fed Chair Janet Yellen’s speech titled “Inflation, Uncertainty, and Monetary Policy", due out tonight for future USD direction.

Global equity markets remain mixed - Dow -0.31%, S&P 500 -0.33%, FTSE -0.13%, DAX +0.02%, CAC -0.27%, Nikkei +0.50%, Shanghai -0.33%.

Gold prices are up 0.9% trading at $1,308 an ounce. WTI Crude Oil prices have started the week on the front foot, up 2.3% trading at $51.81 a barrel.

Current indicative rates:

NZDUSD    0.7269    -0.8%
NZDEUR    0.6138    -0.1%
NZDGBP    0.5397    -0.5%
NZDJPY      81.13     -1.4%
NZDAUD    0.9152    -0.7%
NZDCAD    0.8981    -0.7%
GBPNZD    1.8528     0.5%


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

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