The Kiwi Dollar opens lower once again, this time dragged down by a weaker Australian Dollar which lost ground after yesterday’s labour market data. The U.S Dollar was generally weaker overnight, after earlier finding support yesterday after a slightly more hawkish than expected U.S Fed statement.
NZ GDP AT High End of Expectations
Yesterdays Q2 GDP data was a touch stronger than expected coming in at 0.5% vs market expectations of 0.4% for the quarter. Annual growth was at 2.1% vs expectations of 2.0%. The number was in line with RBNZ expectations but still the lowest rate of growth in 5 years. The results were consistent with the view that economic momentum might be slowly running out of puff. The Kiwi immediately gained 20 points on the result before falling back in the afternoon on the back of a weaker AUD.
Australian Unemployment Ticks Higher
The odds of a rate cut from the RBA increased yesterday as Australian labour market data moved in the wrong direction. While the number of people in employment was higher, it was not enough to keep pace with the number looking for work, which saw the unemployment rate nudge higher to 5.3% vs market expectations of 5.2%.
Pound Continues Good Run
The British Pound made ground overnight boosted by a continued good vibe around Brexit. Overnight the Bank of England held the policy rate unchanged at 0.75% with a unanimous vote in a widely expected decision. The resurgent GBP combined with a weaker NZD has seen the NZD/GBP cross rate fall to a 4 month low level overnight.
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