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Kiwi Continues Slide | Hits Multi Year Low

Published August 23, 2019

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.