By Dan Bell
The NZDUSD opens at 0.6615 (mid-rate) this morning.
The Canadian dollar has been the standout performer over the past 24hrs with the announcement of a new US-Canada trade deal having a positive effect on both the CAD and global equity markets.
Late yesterday afternoon US and Canadian officials agreed terms on a new US- Canada trade deal to replace the North American Free Trade Agreement (NAFTA). The new United States-Mexico-Canada Agreement (USMCA) is aimed at providing more market access to US dairy farmers in return for a side agreement that will see the Trump administration guarantee not to impose tariffs on most auto imports from Canada. President Trump who has not been shy in criticising the NAFTA agreement described the USMCA as a “historic transaction and a great deal for all three countries.
Overnight the US Institute for Supply Management reported the pace of growth in the US manufacturing sector for the month of September slowed slightly more than expected. The ISM purchasing managers index decreased to 59.8 in September, down from 61.3 in August and below the forecast 60.3 reading.
The British pound strengthened against its major rivals after its manufacturing sector expanded at a faster pace than expected in September. The IHS Markit report showed the manufacturing Purchasing Managers’ Index unexpectedly increased to 53.8 in September following August’s upwardly revised 53.0 reading. Economists had forecast the index to fall to 52.5 from August’s initially estimated 52.8 result.
This afternoon the RBA are widely expected to keep its benchmark interest rate at its record low of 1.5%. Although recent economic growth and jobs data has been strong, a lack of inflation and wage growth continue to be a major concern for the RBA.
Equity markets are broadly higher, – Dow +0.81%, S&P 500 +0.48%, FTSE -0.19%, DAX +0.75%, CAC +0.24%, Nikkei +0.52%, Shanghai +1.06%.
Gold prices have edged lower, down 0.3% trading at $1,188 an ounce. WTI Crude Oil prices continue to surge higher, up 2.4% trading at $74.78 a barrel.
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »