The NZ Dollar opens slightly lower this morning after bouncing back from half cent losses overnight. The weaker Kiwi was driven by a broadly stronger US Dollar which benefitted from stronger than expected services industry data earlier this morning. The results of the latest Global Dairy Auction were also announced earlier showing another gain in prices, with the GDT index rising by 3.3%. Yesterdays main event saw the RBA keep interest rates on hold as expected.
Strong Data Boosts Greenback
The US non-manufacturing ISM index has rebounded by more than expected in February. The index has risen to 59.7 vs expectation of 57.3, with the surprise result boosting the USD. US new home sales also beat market expectations, easing concerns over the state of US economy. The next major US data is the eagerly anticipated non-farm payrolls, due out on Saturday morning.
RBA Unmoved as Expected
The RBA has left the cash rate on hold at 1.5% as expected. This was the 31st month in a row that rates have been unchanged. The Australian Dollar was marginally higher after the announcement as the bank stuck to its relatively upbeat view of the economy, despite some recent soft data. The RBA is forecasting the economy to grow at 3.0% in 2019. This positive view will be tested throughout the week with the release of GDP data this afternoon, followed by retail sales and trade balance numbers tomorrow. Before all of this, RBA Governor Lowe will be giving a speech this morning titled “the housing market and the economy”. Lowe had quite an impact last time he spoke, and there will be much interest in what he has to say.
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