HiFX Morning Update July 27, 2018

The NZDUSD opens lower at 0.6785 this morning.

The NZD tracked the EUR lower after the European Central Bank reaffirmed that it will end its stimulus program this year, while indicating interest rates are on hold for at least the next 12 months.

Trade tensions eased after the US agreed to hold back from imposing tariffs on cars from the EU. The two sides also agreed to begin talks to cut other trade barriers. This benefited the NZD, as risk appetite was revived, but the rally was relatively short-lived.

The USD rebounded from 2-week lows overnight on the release of solid economic data. The markets are now fully-focused on what are anticipated to be strong US GDP numbers- these hit the tapes tonight.

The Chinese yuan fell again yesterday. The currency has now fallen over 6% since mid-June as global trade tensions ratcheted higher. However, China has stated it has no intention to devalue the yuan in order to help exports.

There is no data scheduled for release on the domestic calendar today.

Global equity markets were mixed on the day – Dow +0.5%, S&P500 -0.3%, FTSE +0.1%, DAX +1.8%, CAC +1.0%, Nikkei -0.1%, Shanghai -0.7%.

Gold prices gained 0.6% to USD$1,232 an ounce. Oil prices (WTI) jumped 1.1% to USD$69.25 per barrel.

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