The Kiwi Dollar has gained over 1% from yesterdays opening levels as the US Dollar lost ground across the board on dovish comments from US Fed officials earlier this morning. More FOMC members have indicated they favour a pause in rate hikes, suggesting that increases from them may be slower in coming than previously indicated. Some have even going as far as suggesting the next move in interest rates could be a cut. The market had generally been expecting at least two further hikes from the US Fed this year, and the comments overnight have weighed on the greenback. Economic data will be closely watched, although no official data is currently being released due to the US Federal Government shutdown. The latest number to be missed is the US Trade Balance for November.

Trade Talks Conclude

Risk appetite across markets has improved amid hopes that the US and China will reach a trade agreement. The talks finished up yesterday with both sides talking up the prospects for an agreement, but there is still much work to be done before the March 1 deadline. It is unlikely anything will be resolved by this date, and many expecting extensions after that.

Euro Employment Numbers Surprise

The Euro made good ground overnight as better than expected Euro Zone employment and a broadly weaker USD pushed the EUR/USD to a 2 month high. Euro unemployment dropped to 7.9% from 8.0% in November, when the market had been expecting the number to rise to 8.1%.