HiFX Morning Update, July 28 2016

HiFX Morning Update, July 28 2016

NZDUSD 0.7070 0.4%
NZDEUR 0.6392 -0.3%
NZDGBP 0.5353 -0.2%
NZDJPY 74.42 1.0%
NZDAUD 0.9445 0.7%
NZDCAD 0.9325 0.5%

The NZDUSD opens at 0.7070 (mid-rate) this morning.

As widely expected the Federal Reserve announced an unchanged overnight interest rate target range of 0.25% to 0.5% at this morning’s conclusion of their 2 day policy meeting. In the accompanying statement the Fed noted that the labour market has “strengthened” and that "Job gains were strong in June following weak growth in May." They went on to say "Near-term risks to the economic outlook have diminished," and that household spending has been growing strongly, these comments have many economists now believing that there is potential for a rate hikes in both the September and December meetings, prior to this morning’s statement the market was pricing in a 20% chance of a hike in September and just below a 50% chance of a hike in December. On the downside the Fed expressed concern over “soft” business investment and inflation which they expect to remain low in the near term.

In other U.S. news overnight both the durable goods orders and pending home sales for the month of June were well short of economists estimates. The new orders for U.S. manufactured durable goods plummeted 4% following a revised 2.8% decrease in May, the pending home sales was a little better edging up by 0.2% but again well shy of the expected 1.3% increase.

Global equity markets with the exception of the Shanghai are in positive territory - Dow +0.27%, S&P 500 +0.12%, FTSE +0.39%, DAX +0.70%, CAC +1.09%, Nikkei +1.72%, Shanghai -1.91%.

Gold prices are currently up 1.3% at $1,337 an ounce, WTI Crude Oil continues to fall currently down 2.1% at $42.04 a barrel.

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