HiFX Morning Update, April 6 2018
The NZDUSD opens at 0.7266 (mid-rate) this morning.
The NZD is the worst performer of the G10 currencies overnight as global markets rallied strongly assisting the USD strength on optimism for US-China trade negotiations.
A short week - only 3 days so, far but the Kiwi managed to trade a 129 point range or 1.8%. Technical resistance was tested Wednesday and Thursday at 0.7320 for the NZDUSD and failed to break higher.
0.7320 is the top of the downward trend channel in the daily charts and top of the Bollinger Bands which means the highest probability for the Kiwi is that it will trend lower next week to 0.7200, and a break of 0.7150 (March 21 low) opens the way for 0.7070 (Jan 4 low) which would be the bottom of the trend channel.
The seasonally adjusted IHS Markit/CIPS UK Services PMI® Business Activity Index dropped from 54.5 in February to 51.7 in March, to signal the weakest service sector performance since July 2016.
New applications for U.S. Unemployment Benefits increased more than expected last week, but the number of Americans on jobless rolls fell to its lowest level since 1973, pointing to tightening labour market conditions. Initial Claims for state Unemployment benefits rose 24,000 to a seasonally adjusted 242,000 for the week ended March 31.
The U.S. Trade Deficit widened by more than forecast to a fresh nine-year high in February on broad-based demand for imports, ahead of Trump administration tariffs that have raised the spectre of a trade war. The gap increased 1.6% in February to $57.6 billion, compared with the median estimate of economists for $56.8 billion.
Canada's Merchandise Trade Deficit totalled $2.7 billion in February, widening from a $1.9 billion deficit in January. Imports rose 1.9%, mainly due to higher Imports of energy products and Exports increased 0.4%.
Major Data Announcements tonight include: US Unemployment rate, US Non-Farm Employment change, US Average Hourly Earnings, US Fed Chair Powell speaks, US Consumer Credit, Canadian Unemployment rate and Employment change
Global equity markets are higher except China: Dow +1.11%, S&P 500 +0.85%, FTSE +2.35%, DAX 2.90%, CAC 2.62%, Nikkei +1.53%, Shanghai -0.18%.
Gold prices are down $8 or 0.6% currently trading at $1,325 an ounce. WTI Crude Oil prices are up 0.4% trading at $63.64 a barrel.