The New Zealand Dollar moved lower overnight, falling to its lowest level since January 2016. The fall in the Kiwi began late yesterday afternoon as the Chinese Yuan came under selling pressure. The NZD and AUD both followed the CNY lower, continuing the recent strong relationship between the currencies in the midst of the U.S-China trade war.
Europe and US PMI’s Mixed
Euro zone manufacturing data was better than expected last night, although the levels do remain at historically low levels. August output in both Germany and France was ahead of market expectations and up from July. While in the U.S, manufacturing PMI fell to 49.9 vs market expectations of 50.5. The data showed factory output contracting for the first time in 10 years. The US Dollar was mixed, losing ground on the weak data, but finding buying support after news emerged that two US Fed officials saw no case for further interest rate cuts at this time.
GBP Higher on Brexit News
The British Pound was the big mover overnight, gaining over 1% on renewed Brexit optimism, as PM Boris Johnson continued his tour around Europe, meeting with major leaders.
The Day Ahead
On the local front we have NZ retails sales data later this morning, although this is not expected to be a major market mover. The big event in the next 24 hours is US Fed Chairman Powell’s speech tonight at the Jackson Hole conference. Markets will be looking to see if Powel continues with his “mid-cycle” message in reference to the last rate cut, given renewed concerns about the global economy and continued trade tensions with China.
© Copyright - EncoreFX, 2018.The information in this post is provided for general information purposes only and has been prepared without taking into account any person’s objectives, financial situation or needs and, accordingly, it does not constitute personalised financial advice under the Financial Advisers Act 2008, nor does it constitute advice of a legal, tax, accounting or other nature to any person. Before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. We recommend that investors seek advice from their usual adviser before taking any action. EncoreFX (NZ) Ltd is a registered Financial Services Provider (FSP 461386), and is a licensed derivatives issuer under the Financial Markets Conduct Act 2013. EncoreFX (NZ) Ltd has lodged a Product Disclosure Statement (PDS) for each of our derivatives with the Registrar on 21-Dec-2016. A copy of each PDS is available from us or from the Registrar at www.business.govt.nz/disclose.