The NZD came under further downward pressure yesterday following disappointing Trade Balance and Business Confidence data releases. New Zealand’s Trade Balance plunged into negative territory recording a -$1235M deficit in September following on from a $98M surplus in August. The report had been expected to show an $825M deficit. Later in the day the ANZ reported business confidence according to their measure fell from 18.3 in August to 0.0 in September.
Overnight US economic data releases fell short of economist’s estimates with Consumer Confidence dipping to 119.8 in September down from 120.4 in August, and just below its forecast 119.9 reading. New home sales in the US for the month of August unexpectedly decreased with the Commerce Department report showing sales were down 3.4% to an annual rate of 560k in August following July’s upwardly revised 580k sales. Sales had been forecast to increase to 583k from the previously reported 571k in July.
This morning Federal Reserve chair Janet Yellen while reaffirming the Fed’s intention to continue to gradually raise interest rates, admitted the central bank may have “misjudged” the factors dragging on US inflation. In a speech titled "Inflation, Uncertainty, and Monetary Policy" Yellen said “My colleagues and I may have misjudged the strength of the labour market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation.” These comments seem to have stalled the recent USD rally.
Global equity markets remain mixed - Dow +0.05%, S&P 500 +0.14%, FTSE -0.21%, DAX +0.08%, CAC +0.03%, Nikkei -0.33%, Shanghai +0.06%.
Gold prices are trading back below $1,300 a barrel currently sitting at $1,297an ounce. WTI Crude Oil prices have edged higher, up 0.2% trading at $51.93 a barrel.
Current indicative rates:
NZDUSD 0.7202 -0.9%
NZDEUR 0.6102 -0.6%
NZDGBP 0.5352 -0.8%
NZDJPY 80.77 -0.4%
NZDAUD 0.9132 -0.2%
NZDCAD 0.8889 -1.0%
GBPNZD 1.8684 0.8%
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