While there has been some intraday movement in currencies, there hasn’t been a great deal of change since the last close, with the USD a touch softer and GBP giving up a little of its recent gains.
No prizes for guessing where the NZD is at present. Yesterday I joked about a new RBNZ policy of a NZD/USD peg and one might say there’s nothing to refute that hypothesis. As I write we sit at 0.6740. The last six NY closes on Bloomberg data have been 0.6745, 0.6738, 0.6738, 0.6763, 0.6765, 0.6744 and 0.6740. Any spot trader that has made money trading Kiwi this week should buy a Lotto ticket.
That said, there was a bit of intraday movement. Right on cue at 8:30am yesterday, Fonterra announced an opening forecast milk price of $4.25 per kg/milk solids, very much at the low end of expectations. This was a trigger for NZD selling, seeing it fall from 0.6760 to just below 0.67 by early afternoon.
Then the NZ Budget was released and this helped lift the NZD. The government issued a solid set of fiscal accounts, with a modest upward revision to projected operating balances, with surpluses as far as the eye can see. We saw a modest 25pip recovery before retesting 0.67 last night. The movement since then has been modestly positively.
AUD is up modestly as are other commodity currencies. Oil prices, both WTI and Brent, broke through the $50 per barrel mark, although we currently trade a little below that this morning. Oil prices have been buoyed by signs of falling US production and, more recently, the chunky fall in crude inventories reported earlier this week. AUD has found some support around the 0.72 mark after its steady decline over the past month, while NZD/AUD has met resistance around the 0.94 mark a few times this week.
The yen is the strongest of the majors, although up by only about 0.4%, with USD/JPY trading at 109.70. There is little else to report, other than GBP finally meeting some selling pressure after breaching the 1.47 handle, and it currently sits at 1.4660. The USD weakened on the durable goods orders report, with core orders much weaker than expected, but it soon recovered. The DXY index is down 0.2% for the day.
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2 Comments
Fonterra announced an opening forecast milk price of $4.25 per kg/milk solids, very much at the low end of expectations
Then expectations were wrong.
Expectations don't make the opening forecast (that real advance is based on).
Q: What needs happen to get through to the Expectationers?
https://www.youtube.com/watch?v=v-q5womZ3XY
- or expectating professionals at work - money for jam.
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