HiFX Morning Update, August 3, 2016

HiFX Morning Update, August 3, 2016

NZDUSD 0.7242 0.8%
NZDEUR 0.6448 0.2%
NZDGBP 0.5421 -0.4%
NZDJPY 73.02 -0.7%
NZDAUD 0.9512 0.0%
NZDCAD 0.9475 0.6%

The NZDUSD opens at 0.7242 (mid-rate) this morning.

The NZD has made small gains against the majority of its trading partners helped higher by the latest GDT auction. This morning’s auction saw world dairy prices surge higher, with the latest index up 6.6% from the previous auction 2wks ago. Whole milk powder which has the largest bearing on Fonterra’s payout rose 9.9% to $2,265 a tonne, volumes were also significantly higher with a total of 34,928 tonnes selling this morning, an increase of 11.4% from the previous auction.

Late yesterday afternoon the Reserve Bank of Australia cut its cash rate by 25 basis points from 1.75% to 1.5%, a new record low. Although the AUD fell in immediate response to the announcement it wasn’t long before the AUD retraced the move and opens up this morning unchanged against the NZD.

Overnight construction spending out of the U.K printed ahead of economists estimates but still fell at its fastest pace since June 2009. The index had been expected to fall from 46.0 in June to 44.0 in July but last night’s announcement had the index 45.9.

Falling oil prices continue to put equity markets under pressure, with crude oil futures falling back below $40 a barrel for the first time since April. Overnight, tonight the US energy information administration release the latest crude oil inventories with the market expecting a surplus of 1.7m barrels.

Global equity markets have fallen further overnight - Dow -0.54%, S&P 500 -0.73%, FTSE -0.73%, DAX -1.08%, CAC -1.84%, Nikkei -1.47%, Shanghai +0.61%.

Gold prices have gained 1% overnight, currently trading at $1366 an ounce, WTI Crude Oil continues to fall currently down 1.4% at $39.51 a bar

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