The Kiwi Dollar opens at similar levels to yesterday, trading a fairly narrow range ahead of this morning’s much anticipated NZ inflation numbers at 10.45am. A lack of international data has seen most currencies remain flat, although commodity currencies (AUD and CAD) both ran into selling pressure which has seen gains in the NZD/AUD and NZD/CAD cross rates overnight.

All Eyes on NZ Inflation

Local focus today will be the Q4 NZ CPI data released at 10.45am. Market expectations are for a flat result of 1.8% annual inflation (down slightly from last quarters 1.9%), and any significant variation from this number will no doubt move the NZD this morning.

Market Sentiment Under Pressure

Global market sentiment appears to have taken a hit with equity prices falling over 1.5% as markets resumed after the long weekend U.S. The U.S-China trade war continues to cast doubt with President Trump tweeting yesterday for China to “stop playing around” and “do a real deal”. Meanwhile the U.S Government shutdown entered its 32nd day as President Donald Trump’s latest funding proposal for a border wall in exchange for extending temporary protections to immigrants was swiftly rejected by Democrats. However, Senate Majority Leader, Mitch McConnell, said he intended to bring it to the floor this week.

GBP Higher After Strong Employment Number

The British Pound was the best performer of the major currencies overnight as better than expected employment data surprised markets. UK employment was up by 141,000 jobs in December vs expectations of around 87k. Unemployment in the 3 months to November was 4.0%, lower than the expected 4.1%. The Pound made gains on this data, despite ongoing Brexit uncertainty.