The NZDUSD opens lower at 0.8545 this morning in volatile trading.
It is all about the US Federal Reserve Open Market Committee (FOMC) interest rate meeting this morning. The FOMC announced a further US$10 billion cut to its monthly bond purchase program and maintained the Fed Funds Rate between 0.0%-0.25%, as widely expected. This is the 3rd consecutive reduction in that bond-buying program.
The FOMC forecast an additional 0.50% of tightening in 2016, despite recent softer data. The outlook is for continued economic progress, and the FOMC expected to maintain the current target rate for Fed Funds well past the time unemployment rates declines below 6.5%.
The USD rallied higher (NZDUSD lower), equity markets and gold prices lower, and bond prices fell in response to the FOMC decision and statement.
Here is the link to the full statement.
In other news, Ukrainian tensions eased as Putin reiterated that Russia did not intend to seize any other regions of Ukraine.
NZ GBP data will be released at 10:45am this morning. Yesterday's NZ Current Account numbers were bang on expectations.
Global equity markets were mixed on the day - Dow -0.3%, Nikkei -0.2%, Shanghai -0.8%, FTSE -0.5%, DAX +0.4%
Gold prices fell 1.6% to USD$1336. Oil prices gained 1.6%.
The current indicative rates are:
NZDUSD 0.8545
NZDEUR 0.6180
NZDGBP 0.5170
NZDJPY 87.60
NZDAUD 0.9465
NZDCAD 0.9615
NZ quarterly GDP numbers will hit the tapes at 10:45am today.
US Weekly Unemployment Claims, Existing Homes Sales, and Philly Fed Manufacturing Index will be released tonight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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