By Dan Bell
The NZDUSD opens at 0.6605 (mid-rate) this morning.
The British pound has been the main focus for investors in what has been a quiet start to the trading week with the US enjoying a long weekend.
The GBP is once again the weakest performing of the G10 currencies with new concerns about Brexit negotiations and weak UK manufacturing data combining to put more downward pressure on the currency.
Last week investors brought GBP after the European Union’s chief Brexit negotiator, Michel Barnier hinted that a Brexit breakthrough was imminent, and that “the EU is preparing to offer a partnership with Britain such has never been with any third country.” however on Sunday during an interview with the German newspaper Frankfurter Allgemeine Zeitung, Mr Barnier appeared to backtrack, saying that he was “strongly opposed” to the British government’s proposals on future trade ties after it leaves the EU. And that the British have a choice to make. “They could stay in the single market, like Norway, which is also not a member of the EU – but they would then have to take over all the associated rules and contributions to European solidarity.
The GBP was dealt a further blow overnight with data from IHS Markit showing the UK manufacturing sector expanded at the weakest pace since April 2016. The report showed the manufacturing Purchasing Managers’ Index fell to 52.8 in August from 53.8 in July.
The only data of note during our trading day should see the RBA keep rates on hold at this afternoon’s monetary policy statement with the tone of the statement dictating direction for the NZDAUD cross rate.
European equity markets have had a mixed start to the week, – Dow -Closed, S&P 500 -Closed, FTSE +0.97%, DAX -0.14%, CAC +0.13%, Nikkei -0.69%, Shanghai -0.17%.
Gold prices are unchanged at $1,200 an ounce. WTI Crude Oil prices have edged higher, up 0.5% to $69.37 a barrel.
Current indicative rates:
Upcoming Data releases (NZST):
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »