Kiwi open remains little changed this morning, trading a thin 20-point range over night and we find ourselves back where we were yesterday morning at .6761. The USD has had a relatively stable night, given its recent push to the downside. AUD and GBP cross rates have moved a little further in the importers favour as the market wallows at the head of the week , and we remain of the view, at this stage, of a 25 basis point cut by the Fed at the end of this month .
GBP continues its lumpy ride, with all the moving parts relating to Brexit and the UK leadership conspiring to sink the currency. For Kiwi importers NZDGBP has improved 5% in the last month alone, going from .5150 topping out at .5440 overnight. Last night saw the resignation of senior government minister Sir Alan Duncan, in opposition to Boris Johnsons leadership tilt and the promises of two further incumbents, in the event of Johnson winning the ballot and are we beginning to see the basis of a Tory opposition to Mr Johnson on the backbenches? This mess is set to continue, and the currency looks forward to further volatility.
As we reported yesterday, it’s a fairly light week in terms of market moving data releases, focus remains on Wednesdays (our time) UK leadership outcome and the ECB interest rate decision on Thursday night.
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