HiFX Morning Update. August 18 2016

HiFX Morning Update. August 18 2016

NZDUSD 0.7242 -0.4%
NZDEUR 0.6418 -0.4%
NZDGBP 0.5552 -0.4%
NZDJPY 72.58 -0.5%
NZDAUD 0.9475 0.3%
NZDCAD 0.9312 -0.4%

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

After initially rallying following the release of the FOMC meeting minutes the USD has retraced the move and now sits at levels seen just before the announcement. The key points of the minutes are listed below.

• Split fed in July sought to keep options open on rate hike
• Uncertainty from Brexit, May hiring slowdown receded
• General agreement to accumulate more data before rate move
• Some saw another rate hike appropriate soon
• Several wanted to wait for more confidence on inflation
• Most saw U.S. at or approaching full employment
• Several saw wage increases as evidence of tightening labour markets
• Others uncertain about trajectory of inflation
• Long-term policy framework discussed, decisions not needed for some time
• European banks under pressure, particularly Italian banks
• Staff saw U.S. financial system resilient to Brexit vote

The British Pound received a boost overnight after stronger than expected employment data. The data release showed unemployment remained at 4.9% for the second quarter while the employment rate spiked to 74.5% during the same period, its highest level since records began. There was also an unexpected drop in the number of people claiming unemployment benefits with the report showing a decrease of 8.6k people vs. expectations of increase of 9k.

Global equity markets are mixed - Dow +0.10%, S&P 500 +0.14%, FTSE -0.50%, DAX -0.58%, CAC -1.30%, Nikkei +0.90%, Shanghai -0.02%.

Gold prices are little changed trading at $1,349 an ounce, WTI Crude Oil has edged lower currently trading at $46.50 a barrel.

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