The Opening Bell: Where currencies start on Thursday, January 10, 2019

The Opening Bell: Where currencies start on Thursday, January 10, 2019

By Dan Bell

The NZDUSD opens at 0.6801 (mid-rate) this morning.

Global equity markets and risk linked currencies continue to benefit from optimism that the US and China are getting closer to agreeing potential trade deal, after talks between US and Chinese officials were extended to a third day.

After underperforming yesterday the NZD is the strongest and the JPY the weakest performing of the G10 currencies as investors add risk to their portfolios.

Global oil prices are also benefitting from the trade deal optimism with WTI up circa 5% over the past 24hrs. In what is the longest rally in 18mths oil prices have now risen for eight consecutive days.

As widely expected the Bank of Canada earlier this morning kept its OCR unchanged at 1.75% and following the recent run of underwhelming economic data downgraded its 2019 GDP forecast to 1.7%. The Central Bank had forecast 2019 GDP to run at 2.1% back in October.

This morning’s FOMC meeting minutes will be the main driver for markets today although many economists  believe these are now outdated at best, following Fed Chair Powell’s comments last week when he said that the central bank was listening “carefully and sensitively” to the “market’s risk concerns” and it could “shift the process” of balance sheet normalization if necessary, as there was "no preset path for policy.” This was a fundamental change from the FOMC meeting when the Fed indicated that balance sheet normalisation would be automatic.

Global equity markets have pushed higher, Dow +0.55%, S&P 500 +0.47%, FTSE +0.66%, DAX +0.83%, CAC +0.84%, Nikkei +1.10%, Shanghai +0.71%.

Gold prices are little changed trading at  $1,287 an ounce. WTI Crude Oil prices have surged higher, up 4.9% trading at $52.53 a barrel.

Current indicative rates:

NZDUSD 0.6801 +1.1%
NZDEUR  0.5892 +0.3%
NZDGBP 0.5318 +0.5%
NZDJPY 73.59 +0.8%
NZDAUD 0.9467 +0.5%
NZDCAD 0.8982 +0.4%
GBPNZD 1.8804 -0.5%

 

 

 

 

 

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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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