HiFX morning Update, November 20, 2018

NZDUSD 0.6838 -0.4%
NZDEUR 0.5969 -0.8%
NZDGBP 0.5315 -0.7%
NZDJPY 76.88 -0.6%
NZDAUD 0.9375 -0.2%
NZDCAD 0.9015 -0.2%
GBPNZD 1.8815 0.7%

The NZDUSD opens at 0.6838 (mid-rate) this morning.

An increase in US-China tensions following the weekend’s Asia Pacific Economic Cooperation (APEC) summit has seen the NZD retreat from last week’s highs and led to a further sharp fall in US equity markets.

For the first time in its 29 years, the 21-member APEC group was unable to issue a joint communique at the conclusion of the summit. It is understood that China and the US failed to see eye-to-eye on reform of the World Trade Organisation and not surprisingly were at loggerheads over tariffs, intellectual property and artificial intelligence. The increase in US- China tensions is a concern for investors with US President Donald Trump and his Chinese counterpart Xi Jinping due to attend the G20 summit in Argentina later this month.

Overnight the US National Association of Home Builders reported a sharp fall in US homebuilder confidence with the index plummeting to 60 in November after hitting 68 in October. Economists had expected the index to edge down to 67, the index is now sitting at its lowest level since August 2016.

Brexit-related concerns has seen confidence among British businesses sink to its lowest level in 9-years, with Markit reporting the net balance of firms anticipating a rise in business activity in the next 12 months was +32, down from +39 in June.

The RBA monetary policy meeting minutes will dictate NZDAUD direction during our trading day, while overnight tonight farmers will be hoping global dairy prices can stop the rot, following 6 consecutive falls in the index.

Global equity markets are mixed, - Dow -1.63%, S&P 500 -1.61%, FTSE -0.19%, DAX -0.85, CAC -0.79%, Nikkei +0.65%, Shanghai +0.91%.

Gold prices are unchanged trading at $1,221 an ounce. WTI Crude Oil prices are down a further 0.4% trading at $56.46 a barrel.

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