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Kiwi Lower Ahead of Big 24 Hours

Published July 31, 2019

The Kiwi Dollar opens slightly lower ahead of tomorrow morning’s FOMC rate decision, while the U.S Dollar was generally firmer as data released overnight was better than expected. A big 24 hours of announcements ahead including NZ Business Confidence, Chinese PMI, and Australian Inflation this afternoon, followed by Euro Zone and Canadian GDP tonight, and then the big one, the FOMC rate decision at 6am tomorrow morning.

Positive U.S Data

Economic data released overnight was better than expected with consumer confidence spiking to 135.7 vs forecasts of 125.0. The USD found support on the back of these numbers despite more tweets from President Trump directed at China, while trade negotiations commence in Shanghai. Trump’s tweets included a warning to China not to wait for the 2020 U.S election to make a trade deal. He also said that Chinese negotiators “just don’t come through” on agreements. Markets will be looking for any news from the negotiations ahead of tomorrow’s FOMC decision.

Pound Fall Continues

The Pound was again the main mover of the major currencies falling to a 28 month low yesterday as markets further priced in a hard Brexit. PM Boris Johnson continued to reaffirm the message of – Brexit “no matter what”.

Bank Of Japan Keep Rates Steady

There was little impact from yesterday’s BoJ meeting, with the central bank keeping rates steady as expected. The bank added that they were committed to keeping rates at these low levels “for an extended period of time at least through to around Spring 2020”.