HiFX Morning Update 6 June 2018 - NZDUSD opens at 0.7024

The NZDUSD opens at 0.7024 (mid-rate) this morning.

The GBP is the strongest performing of the G10 currencies surging higher after better-than-expected UK service sector PMI.

The Survey data from IHS Markit showed the UK service sector activity expanded at its fastest pace in three months in May. The index which printed at 52.8 in April and was expected to edge up to 53.0 in May spiked to 54.0.

The AUD is down against all its major rivals with the move lower coming on the back of yesterday afternoon’s RBA monetary policy statement.As widely expected the RBA left its key interest rate unchanged at 1.5%, with RBA Gov Phillip Lowe confirming the bank is committed to keeping rates low as they are “continuing to support the Australian economy.” The RBA also believe “further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.

The latest GDT auction concluded earlier this morning with the overall price index down 1.3%. A total of 21,580MT of product sold under the hammer with the Butter Milk Powder index the standout performer, up 17.7%. The Whole Milk Powder Index edged down 1.1% with an average price of US$3,205/MT.

The US service sector grew at a faster than expected rate in the month of May with the ISM non-manufacturing index rising to 58.6 in May, up from 56.8 in April and ahead of the forecast 57.5 reading.

Direction for the NZDAUD will be driven by this morning’s Q1 GDP data release with expectations of a 0.9% increase on the quarter which would see growth of 2.8% on an annual basis.

Global equity are mixed- Dow -0.06%, S&P 500 +0.07%, FTSE -0.70%, DAX +0.13%, CAC -0.22%, Nikkei +0.28%, Shanghai +0.74%.

Gold prices are inching higher, up 0.4% trading at $1,297 an ounce. WTI Crude Oil prices are bouncing back up 1.2% trading at $65.48 a barrel.

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