The Opening Bell: Where currencies start on Tuesday, June 5, 2018

By Dan Bell

The NZDUSD opens at 0.7030 (mid-rate) this morning.

Risk appetite is on the rise as political tensions in Italy ease. The news that a revived coalition deal between two anti-establishment parties has succeeded in forming a government has seen equity markets and risk linked currencies push higher.

Despite exceptionally strong jobs data out of the US on Friday fears that the US will carry out its threat to impose tariffs on China after the weekend’s trade talks ended without a breakthrough has seen the USD give ground against all its trading partners.

This morning’s Euro-zone data was weaker than expected with producer price inflation printing at 2% in April following a 2.1% print in May and below the forecast 2.4% result. Euro-zone investor sentiment is down sharply in June  with think tank Sentix reporting its investor confidence index fell to 9.3 in June from 19.2 in May. The index was expected to dip to 19.0.

US factory orders fell by 0.8% in April after surging by an upwardly revised 1.7% in March. Orders were forecast to fall by 0.5% after the previously reported 1.6% rise in March.

The only data of note during our trading day is the RBA monetary policy statement which is expected to hold few surprises.

Global equity are broadly higher- Dow +0.61%, S&P 500 +0.45%, FTSE +0.51%, DAX +0.37%, CAC +0.14%, Nikkei +1.37%, Shanghai +0.52%.

Gold prices have edged lower, trading at $1,292 an ounce. WTI Crude Oil prices are down 2.0%, trading at $64.68  a barrel.

Current indicative rates:

Upcoming Data releases (NZST):

• 16:30 - RBA Rate Starement

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