A risk off tone returned to markets overnight sending the New Zealand Dollar back below the US 64 cent level. Coronavirus continues to be the main factor impacting markets and while the number of new cases is trending lower, concerns are now rising over the economic impact of the measures being used to contain the virus. Safe haven currencies were back in demand which has seen the USD make ground against most majors. The fall in the NZD was kicked off yesterday afternoon, after the release of RBA meeting minutes sparked an AUD sell off, bringing the Kiwi down with it. Global Dairy Auctions overnight saw a further fall in prices, and while expected, also weighed on a falling NZD.
AUD Under Pressure After RBA Minutes
The Aussie Dollar lost ground yesterday afternoon after the release of February meeting minutes which noted there was a case for further interest rate cuts. The cautious tone from the RBA will place more importance on employment data to be released tomorrow afternoon.
Euro Continues Fall
The euro was trading lower against the greenback as The ZEW Institute on Tuesday said that the economic sentiment in Germany and the eurozone has dropped in February on the back of macroeconomic uncertainty following the outbreak of the coronavirus. Overall, The ZEW indicator for economic sentiment for Germany fell to 8.7 points in February against the previous reading of 26.7.
The Day Ahead
Australian Wage Price data is released this afternoon, UK Inflation tonight, and then the highly anticipated US FOMC meeting minutes at 8am tomorrow morning NZ time.
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