HiFX morning Update, December 12, 2018

NZDUSD 0.6875 0.0%
NZDEUR 0.6074 0.5%
NZDGBP 0.5494 0.4%
NZDJPY 77.89 0.3%
NZDAUD 0.9555 -0.1%
NZDCAD 0.9219 0.1%
GBPNZD 1.8202 -0.4%

The NZDUSD opens at 0.6875 (mid-rate) this morning.

The British pound continues to be the weakest performing of the G10 currencies falling further overnight on Brexit uncertainty.

Overnight Theresa May’s hopes of renegotiating the UK’s exit from the European Union hit a brick wall in the form of German Chancellor Angela Merkel and President of the European Commission Jean-Claude Juncker. Following her meeting with Mrs May, Angela Merkel made a statement to her political party that she had excluded the possibility of reopening Brexit negotiations. “We said that there will be no further opening of the exit deal,” Merkel said in Berlin this morning. The statement echoes what we heard earlier from Jean-Claude Juncker when he announced there is “no room whatsoever” for renegotiating the Brexit deal.

This morning US producer prices unexpectedly inched higher in November with the Labour department report showing the index rose by 0.1% following on from a 0.6% increase in October. Economists had forecast prices to remain unchanged. The core price index which excludes food and energy prices increased by 0.3% in November following on from a 0.5% rise in October. The result was well above the 0.15 forecast result.

Investor confidence in Germany unexpectedly increased in December with the index rising 6.6pts to -17.5. The index which has a long-term average of 22.5pts has been negative since march of this year. Economists had expected the index to fall to -25.

This morning RBNZ Gov Adrian Orr due to testify before the Finance and Expenditure Select Committee while overnight the last US inflation report will be monitored closely by investors.

Global equity markets are mixed, Dow -0.29%, S&P 500 +0.36%, FTSE +1.27%, DAX +1.49%, CAC +1.35%, Nikkei -0.34%, Shanghai +0.37%.

Gold prices are unchanged trading at $1,244 an ounce. WTI Crude Oil prices have inched higher, up 0.2% trading at $51.85 a barrel.

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