HiFX Morning Update, January 25 2018

HiFX Morning Update, January 25 2018

The NZDUSD opens at 0.7428 (mid-rate) this morning.

The US Dollar Index (DXY) plummeted to its lowest level since December 2014 pushing the NZDUSD up through 0.7400.

Comments from US Treasury Secretary Steven Mnuchin who has welcomed a weaker US dollar stating that a weak dollar was good for trade led to a USD sell-off, and an easing in US bond prices. The DXY is trading back below 90 for the first time in three years.

Earlier this morning the US National Association of Realtors reported existing home sales in the US fell further than forecast in December with sales tumbling by 3.6% to an annual rate of 5.57m. The fall follows November’s 5.1% spike in sales and was greater than the forecast 2.2% decline.

The GBP received a boost overnight after the Office for National Statistics employment report showed that the jobless rate remained at 4.3% in three months to November, after reaching this level in the three months to August. During the same period the employment rate rose to 75.3% from 74.5% a year ago and now sits at its highest level since records began.

The NZD will be dictated by this morning’s quarterly inflation report, with CPI expected to increase by 0.4% after increasing by 0.5% in Q3 2017. Overnight tonight investors will focus on European Central Bank President Mario Draghi’s forward guidance on monetary policy after policymakers agreed in December to revisit it early in 2018.

Global equity markets are mixed - Dow +0.14%, S&P 500 -0.07%, FTSE -1.14%, DAX -1.07%, CAC -0.72%, Nikkei -0.76%, Shanghai +0.37%.

Gold prices are up 1.2% trading at $1,353 an ounce. WTI Crude Oil prices have risen further currently up 0.7% trading at $64.63 a barrel.

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