A quiet start to the week for the NZD, dropping slightly overnight, as trade war concerns continue to weigh on market risk sentiment. The U.S Dollar was higher across the board, which has seen the Kiwi remain flat on most of the major cross rates, apart from the GBP which lost ground on Brexit concerns. Today sees the RBA announcement, and later this evening we have Global Dairy Trade auctions which are expected to show relatively flat pricing. There have been no new developments in the ongoing U.S China trade war.
This afternoon the RBA are expected to keep their OCR unchanged at a record low of 1.5%. The tone of the statement will be closely watched and could impact the short term direction of the NZD/AUD.
The British Pound has been the biggest mover of the major currencies, falling to an 11 month low overnight, as Brexit concerns weighed on the currency. UK International Trade Secretary Liam Fox, said there is now a 60% likelihood of a no-deal Brexit outcome. This was followed by a response from PM Theresa May’s office, which said May still believes that a Brexit deal with the EU is likelier than not and that no deal is better than a bad Brexit Deal.
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