XE Morning Update January 22, 2019

NZDUSD 0.6597 -0.1%
NZDEUR 0.5947 -0.2%
NZDGBP 0.5053 -0.5%
NZDJPY 72.44 -0.5%
NZDAUD 0.9635 0.2%
NZDCAD 0.8627 0.1%
GBPNZD 1.979 0.5%

The NZDUSD opens at 0.6597 (mid-rate) this morning.

Asian equity markets along with risk-linked currencies including the NZD and AUD sold-off yesterday afternoon on news that the Coronavirus outbreak is spreading. Fatalities from the disease have doubled to six with those infected increasing from 200 to 300. The Hang Seng index plummeted 2.8% while the Shanghai and Nikkei indexes were down 1.4% and 0.915 respectively.

As predicted this morning’s global dairy trade auction resulted in another small increase in the overall index (+1.7%) with whole milk powder prices rising 2.4%. We expect dairy prices to continue to rise with production both here and in Australia affected by the drought conditions.

The British pound rebounded overnight after data from the Office for National Statistics showed the employment rate rose by 0.6% annually to a record 76.3% in three months to November. The unemployment rate remained unchanged at 3.8%.

The Phase 1 deal between the US and China seems to have had a positive effect on German economic confidence with the ZEW economic sentiment index rocketing up to 26.7 in January from 10.7 in December. This is the highest reading since July 2015.

Again the data calendar is light during our trading day with updates around the Coronavirus outbreak likely to dominate the headlines.

Global equity markets broadly lower, - Dow -0.1%, S&P 500 -0.05%, FTSE -0.53%, DAX +0.05%, CAC -0.54%, Nikkei -0.91%, Shanghai -1.14%

Gold prices are down 0.6% trading at $1,555 an ounce. WTI Crude Oil prices have inched lower, down 0.3% trading at 58.51 a barrel.

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