The Kiwi Dollar opens higher this morning ahead of tomorrow’s highly anticipated RBNZ interest rate decision and monetary policy statement. Markets were generally quiet due to the U.S Veterans Day public holiday, however risk sentiment was still on edge as markets continue to digest last weeks comments from President Trump around not agreeing to any trade deal at the moment. Weaker than expected credit growth data out of China, and more protest trouble in Hong Kong were also negative for market risk appetite, with equity prices in China and Hong Kong both falling sharply yesterday.
Local Market Awaits RBNZ Decision
A lack of major global economic data in the early part of the week has put local focus squarely on tomorrow’s OCR decision from the RBNZ. Market opinion is split on whether the RBNZ will hold rates or cut by 0.25%, with volatility expected tomorrow given the uncertainty. The NZD has firmed overnight making up some of the losses from last week.
Pound Firmer on Election Optimism
Alongside the NZD, the British Pound was the best performing currency overnight receiving a boost from political developments. Brexit Party leader Nigel Farage has announced that he wont stand candidates in the 317 electorates that the Conservative Party won at the last election. This has boosted the likelihood of Boris Johnson winning a majority at next month’s general election.
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