The New Zealand Dollar opens higher again as risk sentiment improved and demand for risk assets increased, at least for the time being. The Kiwi has been on a bit of a rollercoaster moving past the 59 cent level at one stage overnight before falling back later in trading. The big market news overnight is that US Senators have reached an agreement on an economic stimulus bill and will vote on it later today. US Stock prices have risen and are on track for their first back to back daily rise in six weeks.
Market Awaits Senate Vote on Stimulus Package
US Senators were finally able to reach a fiscal stimulus deal overnight that will inject $2 trillion into the economy and will formally vote on it later today. The package includes a combination of spending and tax relief measures, including $500 billion in spending loan guarantees, $350 billion for small business support, and $1200 payments to individuals below a certain income threshold. The announcement of the deal, along with the extraordinary stimulus measures implemented by the Federal Reserve, has had the initial effect of weakening the US dollar and boosting risk assets. This has helped both the NZD and AUD recover some of their recent losses.
The Day Ahead
Tonight sees the release of US GDP numbers for Q4, although will be largely irrelevant given the Covid-19 situation. Of far more interest will be jobless claims figures for the week ending March 21. The Bank of England meets tonight, but has already made 2 emergency cuts to its base rate, to an historic low of 0.1%.
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