The Kiwi Dollar continued its recent slide as coronavirus concerns continued to weigh heavily on market risk appetite. Market concern over the economic impact of the virus has seen equity markets and commodity prices both fall overnight. The NZD and AUD have come under renewed selling pressure given the two economies exposure to global growth. Safe-haven currencies have been well supported, while the British Pound has been the best performer of major currencies as the Bank of England left interest rates unchanged.
USD Weakens on Mixed Data
The US dollar is down this morning as mixed US data pulled the greenback away from near two-month highs yesterday. The first look at Q4 annualized GDP showed a 2.1% growth rate, slightly ahead of market forecasts, but well below President Trump’s 3% target and its slowest growth rate in three years. The slowdown was led by slumping business investment numbers, likely as a result of prolonged global trade tensions. US Personal Consumption Expenditures (an inflation indicator) and jobless claims also failed to impress, leaving the dollar with nowhere to go but down against most of the majors.
UK Hold Rates
The Pound is stronger across the board today after The Bank of England decided to hold interest rates. Financial markets had been pricing in an approximate 50% chance of a rate cut. The Central Bank’s policy statement confirmed that the door is still open for future rate cuts, mentioning that they may need to act if domestic and global growth numbers do not rebound as forecast, or domestic inflation remains weak.
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