By Dan Bell
The NZDUSD opens at 0.6559 (mid-rate) this morning.
Global trade concerns along with the banking crisis in Turkey weighed on sentiment on Friday, sending equity markets and risk-linked currencies lower.
The Turkish Lira fell sharply on Friday evening plummeting to record low against the USD after it was reported that the European Central Bank had raised concerns over the impact of a weak lira on European banks. According to the report, which appeared in the Financial Times the ECB is concerned about the exposure of some banks in France, Italy and Spain to Turkey’s ongoing problems.
Tensions between the US and Turkey are close to breaking point due to the Turkish detention of U.S. pastor Andrew Brunson. Last week Turkish President Recep Erdogan, urged Turks to sell US dollars and gold and buy the lira, and in response President Trump announced that he has authorized the doubling on steel and aluminium tariffs on Turkey. “Aluminium will now be 20% and Steel 50%” President Trump added.
Friday’s US economic data matched economists’ forecasts with the Labour Department reporting its consumer price index rose by 0.2% in July following on from a 0.1% increase in June. Core CPI which excludes food and energy prices also increased by 0.2% for the third consecutive month.
Global equity markets closed out the week broadly lower on Friday, – Dow -0.77%, S&P 500 -0.71%, FTSE -0.97%, DAX -1.99%, CAC -1.59%, Nikkei -1.33%, Shanghai +0.03%.
Gold prices retraced Thursday’s move down 0.8% closing out the week at $1,210 an ounce. WTI Crude Oil prices edged higher on Friday, up 0.3% to close out the week at $66.77 a barrel.
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »