The NZDUSD opens higher at 0.6612 this morning.
The USD fell, pushing the NZDUSD above 0.6600, after the Federal Reserve Chairman Jerome Powell signalled a willingness to cut interest rates to sustain economic expansion amid fallout from the deepening trade disputes between the US and its largest trading partners.
Commodity-related currencies such as the NZD & AUD rallied in response to Powell’s comments. This is despite the Reserve Bank of Australia cutting interest rates, for the first time in almost 3-years, by 0.25% to a record low 1.25% - the RBA rate cut had been well telegraphed and expected.
RBA Governor Philip Lowe suggested another interest rate cut could be in store as the central bank attempts to drive down unemployment and stimulate inflation. Lowe also mentioned the downside risks to economic outlook from the intensifying global trade disputes. The markets expect the next cut on 6th August.
Overnight, prices in Fonterra’s Global Dairy Trade fell 3.4% from the previous auction, with key Whole Milk Powder dropping 1.5%.
Inflation data from the EU was a mild disappointment which restrained any EURUSD rally.
The GBPUSD made some limited headway amid continuing concerns surrounding a disorderly Brexit and promises from US President Trump of a “phenomenal” post-Brexit trade deal.
There is no data scheduled on the domestic calendar today.
Global equity markets were mostly higher on the day, with the US equity marketing showing large gains on back of Fed Chairman Powell’s interest comments - Dow +1.9%, S&P 500 +1.9%, FTSE +0.4%, DAX +1.5%, CAC +0.5%, Nikkei 0.0%, Shanghai -1.0%.
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:
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- No local data today
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