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Kiwi Drifts Lower | Markets Focussed on Middle East

Published January 8, 2020

The Kiwi Dollar opens lower this morning as the US Dollar strengthened on better than expected data released overnight. Market risk sentiment has stabilized with no further escalation in the US – Iran situation. However, markets remain focussed on Middle East tensions and it will be a key driver of currency movements this week and beyond.

The first Global Dairy Auction of the year saw prices rise by 2.8% in USD terms, offsetting the 5.1% decline at the previous auction.

US Data Positive

The Greenback was broadly firmer as data released overnight was better than expected. The closely watched ISM non-manufacturing number beat market forecasts with the index coming in at 55.0 in December, vs 53.9 in November, and ahead of market expectations of 54.5.

AUD Under Pressure

The Australian Dollar continued to weaken as the bush fire disaster weighs on consumer confidence. The NZD/AUD cross rate has surged higher, despite a weaker NZD, and has reached a five month high overnight.