HiFX morning Update, September 17 2018

The NZDUSD opens at lower at 0.6555 this morning.

The USD strengthened across the board due to positive US economic data and safe-haven buying after reports US President Trump has instructed aids to proceed with tariffs on an additional USD$200 billion of Chinese Imports. The NZD suffered as risk aversion spiked on the increased threat of a global trade war.

The Trump administration has invited Chinese officials for fresh talks to resolve the China-US trade conflict – the threat of further tariffs may be an attempt to gain further leverage during these talks.

Higher US Treasury yields, with the 10-year yield rising to 3% for the first time in 6-weeks, and surging US consumer sentiment also boosted the USD.

The GBP gave back some of this week’s gains but investors remain optimistic the UK will eventually reach a Brexit trade with the European Union.

The domestic data calendar is light this week – Wednesday morning’s Fonterra’s Global Dairy Trade auction, and Thursday’s Q2 GDP, the most significant.

There is no data on the NZ economic calendar today.

Global equity markets were generally higher on the day - Dow +0.0%, S&P 500 +0.1%, FTSE +0.3%, DAX +0.6%, CAC +0.5%, Nikkei +1.2%, Shanghai -0.2%.

Gold prices are fell 1.1% to USD$1,193 an ounce, while WTI Crude Oil prices gained 0.4% to US$68.99 per barrel.

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