HiFX Morning Update, October 3, 2017

HiFX Morning Update, October 3, 2017

The NZDUSD opens at 0.7205 (mid-rate) this morning.

The USD continues to rise, boosted overnight by stronger than expected manufacturing ISM and firmer construction spending. In stark contrast the GBP has been the worst performing of the G10 currencies with the growing rift between Theresa May and Boris Johnson over the length of a planned Brexit transition, and a disappointing manufacturing PMI report weighing on the currency.

The US manufacturing sector unexpectedly expanded in September with the ISM purchasing managers index increasing to 60.8 up from 58.8 in August. Economists had forecast the index to fall back to 50.8. According to the latest Commerce Department report, construction spending for the month of August rose by 0.5% to $1.218T following a 1.2% pull back to $1.212t in July. Spending had been expected to increase by 0.2%

The GBP came under pressure last night after a Conservative party spokesman conceded that the cabinet is split over the implementation of Brexit, and that Boris Johnson’s interventions, risk weakening the UK’s negotiating position. The GBP weakened further after the manufacturing PMI report for the month of September showed a pullback from 56.9 in August to 55.9, below economists’ forecasts of 56.4.

This afternoon the RBA are expected to keep their interest rate unchanged at a record low of 1.5%.

Global equity markets have edged higher - Dow +0.50%, S&P 500 +0.28%, FTSE +0.90%, DAX +0.58%, CAC +0.39%, Nikkei +0.22%, Shanghai +0.28%.

Gold prices are down 1% trading at $1,273 an ounce. WTI Crude Oil prices are on the back foot currently down 2.0% trading at $50.42 a barrel.

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