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HiFX morning Update, December 6, 2018

NZDUSD 0.6894 -0.5%
NZDEUR 0.6072 -0.6%
NZDGBP 0.5401 -0.9%
NZDJPY 77.99 -0.2%
NZDAUD 0.9483 0.4%
NZDCAD 0.9225 0.5%
GBPNZD 1.8515 0.9%

The NZDUSD opens at 0.6894 (mid-rate) this morning.

Waning investor sentiment has seen global equity markets along with risk-linked currencies continue to sell-off.

Brexit headlines are continuing to add to the negative sentiment with Theresa May's government suffering three successive defeats in the British Parliament over the past 2-days.

Overnight UK ministers were forced to publish documents showing Theresa May was told an arrangement designed to prevent a hard Irish border, one of the main sticking points of the negotiation could last "indefinitely" and the UK could not "lawfully exit" without EU agreement. Democratic Unionists have said this would be "devastating" for the UK and are set to side against the government at next week’s parliamentary vote.

Earlier this morning the Bank of Canada as widely expected kept its key rate unchanged at 1.75%, but with the accompanying statement highlighting the falling crude oil price, uncertainty hanging over business investment and the U.S.-China trade showdown investors are paring back their expectations of future rate hikes, with the CAD falling sharply as a result.

The Australian dollar is weaker following a disappointing Q3 GDP data release. The data release showed gross domestic product increased by 0.3% well below the expected 0.6% result and puts GDP expansion on an annual basis at 2.8%, down from 3.4% in Q2, and again well shy of the forecast 3.3% expansion. The NZDAUD cross rate traded to an 8-month high of 0.9500.

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Direction for the NZDAUD cross rate will be dictated by this afternoon’s Australian monthly retail sales report. Market expectations are for sales to edge up by 0.3% following a 0.2% increase in October.

Global equity markets have continued to slide, Dow Closed, S&P 500 Closed, FTSE -1.44%, DAX -1.19%, CAC -1.36%, Nikkei -0.53%, Shanghai -0.53%.

Gold prices are marginally higher, up 0.2% trading at $1,238 an ounce. WTI Crude Oil prices are inching higher, currently up 0.4% trading at $53.58 a barrel.


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