HiFX morning Update, August 17 2018

The NZDUSD opens at higher at 0.6586 this morning.

The NZDUSD gained, as the USD retreated from a 13-month peak, while the Chinese Yuan rebounded from 19-month lows, on news that China will send a delegation to the US in late August to hold a fresh round of trade talks. Doubts persist whether these talks will be able to resolve their trade differences.

White House economic advisor Larry Kudlow commented that a strong USD was a sign of global confidence in the US economy, and that funds were fast-flowing into the US. It was also reported he would like to see the USD stable, as the stronger USD is causing issues for US exporters.

Market optimism was boosted by recovery in the Turkish lira after Qatar pledged to invest USD$15 billion in the country. This positive sentiment spilled-over to other emerging markets such as South Africa, Brazil, and India.

The GBP inched up from 14-month lows on strong UK retail sales, although the ever-present Brexit shadow limited gains.

Yesterday’s Australian employment data showed unemployment dropped to a 6-year low in July, although job gains missed forecasts as the participation rate fell.

NZ Producer Price Index hits the tapes at 10:45am, followed by a speech from the Reserve Bank of Australia Governor at 11:30am. US Consumer Confidence and Inflation Expectations will be released overnight.

Global equity markets surged higher, - Dow +1.7%, S&P 500 +0.9%, FTSE +0.8%, DAX +0.6%, CAC +0.8%, Nikkei -0.7%, Shanghai -0.6%.

Gold prices are trading at USD$1,175 an ounce WTI Crude Oil prices trading down form yesterday at $64.81 a barrel.

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