HiFX Morning Update, March 20 2018

HiFX Morning Update, March 20 2018

The NZDUSD opens at 0.7241 (mid-rate) this morning.

The GBP has been the strongest performing currency over the past 24 hours, advancing against all its rivals following reports that the European Union and the UK have reached a post-Brexit transitional deal.

The deal will enable the UK to continue its European membership and retain the benefits of the single market and customs union until the end of 2020.

In order to reach this agreement the UK has had to accept defeat on a series of demands, including accepting a “back stop” plan of keeping Northern Ireland under EU law to avoid a hard border with the Republic of Ireland.

A Reuters media report suggesting that ECB policy makers have moved their debate to the course of rate hike in 2019 and are of the view that QE program should end this year, has helped support a stronger EUR.

The Eurostat Euro-zone trade balance report showed the trade surplus declined to a three-month low in January with exports declining amid an increase in imports. The trade surplus for January fell to EUR 19.9B down from EUR 23.2B in December. Economists had expected the surplus to edged down to EUR 22.6B.

This morning’s Westpac consumer sentiment data should have little effect on the currency, while overnight tonight the latest GDT auction is expected to show another small fall in dairy prices.

Global equity markets are mixed - Dow -0.42%, S&P 500 +0.01%, FTSE -0.13%, DAX +0.58%, CAC +0.04%, Nikkei +1.65%, Shanghai +0.59%.

Gold prices have edged down 0.5% trading at $1,320 an ounce. WTI Crude Oil prices have fallen sharply, down 1.4% over the past 24 hours, trading at $61.18 a barrel.

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