HiFX Morning Update, February 2 2017

HiFX Morning Update, February 2 2017

The NZDUSD opens at 0.7246 (mid-rate) this morning.

Following yesterday’s disappointing employment report the NZD has continued to slip lower against all its major rivals. The unexpected increase in unemployment 5.2% (4.8% exp) was the trigger for the sell-off, while the increase in the participation rate (people actively looking for work) which now sits at a record high of 70.5% was largely ignored. Many economists agree that a strong participation rate can stimulate an economy and push up inflation.

Overnight US economic data releases helped boost the USD with private sector employment adding 246k jobs in January after climbing by an upwardly revised 153k jobs in December. Economists had expected an increase of 168k jobs. The US purchase managers index rose to 56.0 in January from a revised 54.5 in December accelerating at its fastest pace in over 2 years.

The GBP received a boost overnight with manufacturing output rising at its fasted pace since 2014 despite a record increase in input costs.

This morning all eyes will be focused on this year’s first FOMC statement but with Fed Chair Janet Yellen not holding a press conference it is highly unlikely we will see a change to the Fed funds rate.

Global equity markets have edged higher- Dow +0.14%, S&P 500 +0.07%, FTSE +0.12%, DAX +1.08%, CAC +0.96%, Nikkei +0.56%, Shanghai Closed.

Gold prices have edged lower overnight currently down 0.4% $1,204 an ounce, WTI Crude Oil has slipped further overnight currently down 0.7% at $53.10 a barrel.

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