Kiwi, crude and majors are in focus on Wednesday. Despite the prevailing pre-Christmas hibernation in the markets, a few events stir trading.
Kiwi surged against the down-trending USD, finding support in New Zealand’s 3rd quarter current account deficit, which narrowed to 2.6% of the GDP. Weighed down by the first negative vote on the tax bill, the US dollar index (DXY) started the day on the back foot at 93.00. In turn, this down-move supported USD’s major and minor counterparts such as the kiwi. Hence, NZDUSD hit a daily open of 0.6969 on Wednesday, after a positive Tuesday daily close at 0.69692. Trading at 0.69753 as of writing, the pair follows an ascending trend, targeting daily highs around 0.69856.
Crude in Focus
WTI crude adds gains after API reported a larger-than-expected draw in crude oil inventories in the United States. Consequently, US crude gained around 0.8%, trading at $57.67 a barrel.
In Europe, Brent crude started the day at $63.84 per barrel on market expectation that OPEC will extend its cut of 1.5 billion barrels per day (bpd) beyond the agreed term of March 2018 until the end of the year. Hence, Brent crude trades at $63.80 per barrel.
According to Westpac analysts, ‘supply will remain firm and thus supportive of price. However, the risk of a further lift in US production cautions us against getting too bullish from here.’
Majors in Focus
Majors such as EUR, GBP, USD capture traders’ focus as they await more clues on GBP trading from BOE Governor Carney’s speech due today at 1:15 pm GMT.
A couple of hours away from the event, GBPUSD remains in the area of 1.33, following a daily open at 1.33853. Moved up on Brexit optimism, cable resumed its up-going movement, targeting 1.34s. However, as worry revolves around North Korean headlines about officials moving ahead with tests to load Anthrax onto ICBMs, GBP buyers have not managed to stay in control and push the pair further up.
Last but not least, EURUSD hovers above 1.18446, following a daily open at 1.18368.