HiFX morning Update, August 27 2018

The NZDUSD opens at 0.6680 (mid-rate) this morning.

On Friday Fed Chairman Jerome Powell all but confirmed that the Federal Reserve will hike rates in September while at the same time dampened hopes that the Fed will continue to hike rates at its current expected pace.

Mr Powell in his first speech as Fed chief at an annual conference in Jackson Hole, Wyoming, said there was “good reason” to expect the U.S. economy to sustain its recent strength and that the “gradual process of normalization remains appropriate,” however Mr Powell also noted that inflation which is currently sitting around the Fed’s 2% goal is not showing any signs of accelerating. US equity markets pushed higher following the speech while at the same time the USD slipped lower.

Prior to Mr Powell’s announcement the US Commerce Department reported new orders for US manufactured durable goods decreased by much more than expected in the month of July. The report showed durable goods orders fell by 1.7% in July following a 0.7% increase in June. Economists had expected durable goods orders to fall by 0.5%

The EUR strengthened late on Friday after Destatis reported the German economy expanded at a faster pace than initially estimated in Q2. The report showed the economy grew at 0.5% following 0.4% growth in Q1.

Tier one economic data is thin on the ground until the back end of the week with Thursday morning’s US Q2 GDP result the pick of the international reports, while on the domestic front Thursday’s ANZ business confidence report will be the main focus for local investors.

Global equity markets closed out the week broadly higher on Friday, - Dow +0.52%, S&P 500 +0.61%, FTSE +0.19%, DAX +0.23%, CAC +0.24%, Nikkei +0.85%, Shanghai +0.18%.

Gold prices surged higher on Friday, up 1.7% closing out the week at $1,205 an ounce. WTI Crude Oil prices pushed higher on Friday, up 0.8% to close out the week at $68.36 a barrel.

ends

© Scoop Media