The Kiwi Dollar opens lower this morning as the US Dollar continued to remain firm ahead of U.S Fed Chairman Powell’s testimony to congress tonight. Of the major currencies the Australian Dollar was the weakest performer overnight, which has resulted in good gains in the NZD/AUD cross rate.
Market Awaits Powell Testimony
Markets have been treading water ahead of tonight’s speech from Jerome Powell, which will be scrutinized for clues about the outlook for U.S interest rates. Minutes from last month’s FOMC meeting will also be released shortly after Powell’s testimony. Meanwhile, White House economic adviser, Larry Kudlow, said that the central bank should aim for price level stability and a steady dollar instead of focusing on jobs data. Kudlow further reiterated his belief that the Federal Reserve has room to reduce interest rates when it meets this month and could reverse the rate hike it imposed in December.
On the trade front, the U.S and China are set to relaunch talks with little changed since the deal fell apart. White House officials have spoken with Chinese Vice Premier Liu by telephone and said that talks would continue “as appropriate”.
AUD Falls on Lower Business Confidence
The Australian Dollar dropped by over half a cent after worse than expected Business Confidence Data released yesterday. The NAB business survey showed confidence falling by 5 points to +2 in June, reversing much of the 7 point gain registered in May.
Pound at 2 Year Lows
The GBP fell to its lowest level in 2 years with markets concerned about a slowdown in growth, the ongoing risk of a no-deal Brexit, and the possibility of new general elections. UK GDP figures are due out tonight with markets expecting a 1.3% YOY number.
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