HiFX Morning Update, February 28 2018

HiFX Morning Update, February 28 2018

The NZDUSD opens at 0.7245 (mid-rate) this morning.

The NZD is the worst performer of the G10 currencies in the past 24 hours on a backdrop of broad USD strength after key data releases – US Core Durable Goods, CB Consumer Confidence and Fed Chair Powell’s Testimony.

The NZ Trade Balance was a $566m deficit which was wider than the $227m deficit in January 2017. The latest data is a big swing from December when the country recorded a trade surplus of $596m, the largest ever for a December month. Economists had been expecting exports and imports to cancel each other out in January for a net trade balance of zero.

Orders for business equipment at U.S. factories unexpectedly fell for a second month, a sign that demand is cooling from its hot pace in recent quarters. Excluding transportation-equipment demand, which is volatile, U.S. Durable Goods orders fell 0.3% in January (est. up 0.4%) after rising 0.7% in December.

The Conference Board U.S. Consumer Confidence Index increased in February, following a modest increase in January. The Index now stands at 130.8, up from 124.3 in January.

US Fed Chair Powell Testified to Congress in the semi-annual Monetary Policy Report. Powell downplayed concerns over recent market volatility, arguing Tuesday that the dramatic swings do not weigh heavily on his outlook for the economy and maintaining his expectation for further gradual increases in interest rates. In prepared congressional testimony, Powell emphasized that the job market remains robust, consumer spending is solid and wage growth is accelerating. He also highlighted gains in U.S. exports and stimulative fiscal policy as new "tailwinds" for the economy.

Global equity markets are lower except Japan: Dow -0.11%, S&P 500 -0.29%, FTSE -0.10%, DAX -0.29%, CAC -0.01%, Nikkei +1.07%, Shanghai -1.13%.

Gold prices fell 1.3% or $17 currently trading at $1,315 an ounce. WTI Crude Oil prices are down 1.2% trading at $63.28 a barrel.

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