The Opening Bell: Where currencies start on Tuesday, October 23, 2018

By Dan Bell

The NZDUSD opens at 0.6553 (mid-rate) this morning.

The big news over the past 24hrs was yesterday afternoon’s rally in China’s stock market.The index surged more than 4% its biggest increase in more than 2-years after President Xi Jinping vowed “unwavering” support for the country’s private sector along with a plan to cut personal taxes beginning in 2019.The Shanghai Composite index is down over 20% since February, with the impact of an escalating trade war with the US weighing on investor confidence.

The British pound remains on the back foot despite British Prime Minister Theresa May insisting the a divorce deal is now 95% agreed. Mrs May is due to tell the House of Commons today that a Brexit is 95% done, but is likely to face a backlash from as many as 40 Tory MPs who still believe she needs to toughen her stance. The GBPUSD rate is now trading back below the key 1.30 level.

Overnight Italy refused to revise its economic forecasts  with the Italian prime minister, Giuseppe Conte telling reporters that the government was not being led by “a bunch of hotheads” and that the increased borrowing was needed to ensure that Italy’s economy grows. The budget which is in breach of the European Union budget guidelines is likely to be rejected by the European Commission with speculation mounting that officials in Brussels are set to take punitive action against Italy.

With little in the way of economic data releases over the next 24hrs geopolitical news is again likely to dictate direction.

Global Equity markets are mixed, - Dow -0.35%, S&P 500 -0.34%, FTSE -0.10%, DAX -0.26%, CAC -0.62%, Nikkei +0.37%, Shanghai +4.09%.

Gold prices are down 0.4% trading  at $1,221 an ounce. WTI Crude Oil prices have fallen 0.7% overnight trading at $69.16 a barrel.

Current indicative rates:

NZDUSD 0.6553 -0.1%
NZDEUR  0.5712 0.2%
NZDGBP 0.5051 1.0%
NZDJPY 73.91 0.2%
NZDAUD 0.9251 0.4%
NZDCAD 0.8585 0.6%
GBPNZD 1.9798 -1.0%

 

 

 

 

 

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

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USD 
NZD
End of day UTC
Source: CoinDesk

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