The NZDUSD opens higher at 0.6598 this morning.
The USD has been under selling pressure, pushing the NZDUSD higher, after data shows factory activity in the US slowed. Such growth indicators are likely to deteriorate further as trade tariffs weigh on global commerce and hinder business and consumer sentiment. This, in turn, has raised expectations the US Federal Reserve will lower interest rates in the coming months and please President Trump in the process.
The US interest rate market has now priced in excess of 0.75% of rate cuts over the next 12 months. If seen, this is will place significant downwards pressure on the USD.
Global trade tensions remain elevated. The US has threatened to raise tariffs on Mexican imports, unless they control illegal immigration into the US, and remove preferential trade treatment for India. This is on top of increased tariffs on Chinese imports.
Brexit related angst and terrible UK manufacturing figures has kept downwards pressure on the GBP.
NZ quarterly Overseas Trade Index will be released at 10:45am. The Reserve Bank of Australia has an interest rate setting meeting at 4:30pm – they are expected to lower the Cash Rate by 0.25% to 1.25%.
Global equity markets were mixed on the day - Dow -0.3%, S&P 500 -0.6%, FTSE +0.3%, DAX +0.6%, CAC +0.7, Nikkei -1.0%, Shanghai -0.3%.
Gold prices jumped 1.1% to a 3-month high of USD$1,326 an ounce. WTI Crude Oil prices dropped 1.3% to US$52.80 per barrel.
Current indicative rates:
Upcoming Data Releases (NZT):
- 10:45am - NZ Overseas Trade Index (q/q)
- 1:30pm - AU Retail Sales
- 4:30pm - Reserve Bank of Australia Interest Rate Decision
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