By Dan Bell
The NZDUSD opens at 0.6786 (mid-rate) this morning.
The British pound is the strongest performing of the G10 currencies, having pushed higher after MP’s voted down UK Prime Minister Theresa May’s Brexit proposal.
In the wake of yesterday’s crushing 230 vote defeat Britain’s Leader of the Opposition Labour Party Jeremy Corbyn has put forward a motion of no confidence in the government which will be voted on at 8:00am this morning.
The rise in the GBP comes as investors discount the prospect of a disruptive ‘no deal’ Brexit taking place on March 29th and start to factor in a softer Brexit, or no Brexit at all. Should May’s government survive this morning’s no-confidence motion (as expected) then MP’s will have a say on a new Brexit plan which could include an Article 50 extension or even a second referendum.
Overnight US economic data was mixed with US homebuilder confidence unexpectedly improving in January while US import prices for the month of December fell sharply.
According to the National Association of Home Builders the NAHB/Wells Fargo Housing Market Index increased to 58 in January after falling to 56 in December. Economist had forecast an unchanged result.
The sharp fall in import prices was largely due to plummeting fuel prices, the labour department report showed import prices were down another 1.0% in December after plummeting by a downwardly revised 1.9% in November.
The first G20 meeting of the new year will take place in Tokyo today and conclude at the end of the week.
Global equity markets are mixed, Dow +0.57%, S&P 500 +0.30%, FTSE -0.47%, DAX +0.36%, CAC +0.51%, Nikkei -0.55%, Shanghai +0.00%.
Gold prices have pushed higher, up 0.5% trading at $1,294 an ounce. WTI Crude Oil prices are little changed trading at $52.21 a barrel.
Current indicative rates:
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »