HiFX Morning Update, February 23 2018

The NZDUSD opens at 0.7342 (mid-rate) this morning.

The NZD is little changed against the majors after yesterday morning’s FOMC meeting minutes, with the Japanese Yen the stand out performer in the last 24 hours.

Immediately after the release of the Fed Minutes the market took a full 10 minutes to digest the contents, before the USD weakened 50 points in 15 minutes, posting a 0.7386 high. Then in about-face the NZD/USD fell 1% or 72 points over the next hour where it remained stagnated for the rest of the day.

In the week ending February 17, the advance figure for seasonally adjusted initial claims was 222,000, a decrease of 7,000 from the previous week's revised level. The number of Americans filing for unemployment benefits unexpectedly fell to a near 45-year low last week, but claims for six states were estimated because of Monday's Presidents Day holiday. This data release was the catalyst for the NZD recovery to start today very similar to yesterday’s open.

Britain’s economy grew at the weakest rate in 5 years, leaving the UK lagging further behind other major economies as it prepares to leave the EU. Q4 GDP estimate was 0.4% following an earlier estimate of 0.5% and missing economists’ forecasts that the rate would be unchanged.

European Central Bank policymakers meeting last month felt it was too early to change their communication stance to signal a normalisation of policy, even if confidence was growing that inflation would finally rise back to target, minutes showed. Discussion over tweaking the bank’s stance could still start early this year but policymakers concluded the bank needed to avoid abrupt adjustments and to keep a close eye on the euro’s firming, according to the minutes published overnight.

Oil futures erased a small decline to turn higher overnight after the Energy Information Administration said crude stocks fell by 1.6 million barrels. A survey of analysts by The Wall Street Journal had produced an average estimate for a 1.9 million barrel rise.

Global equity markets are broadly higher: Dow +0.87%, S&P 500 +0.45%, FTSE -0.40%, DAX -0.07%, CAC +0.13%, Nikkei -1.07%, Shanghai +2.17%.

Gold prices are up 0.3% trading at $1,330 an ounce. WTI Crude Oil prices have regained some of the losses earlier in the week now up 2.2% trading at $62.75 a barrel.

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