img NZ
img AUS
img CDN
img US
Call us now: 0800 00 56 17
imgExpress Login

Kiwi Remains Flat | RBA Rate Decision This Afternoon

Published February 4, 2020

The Kiwi Dollar has traded a narrow range overnight, failing to make back recent losses, despite a temporary improvement in market risk sentiment. US equities have rebounded after recent falls, while better than expected US manufacturing data surprised markets, and for the time being eased some of the concerns that Coronavirus is having on global risk appetite. However, commodity prices have remained depressed and this will be weighing on the NZD and AUD. China’s financial markets have returned after a weeks break and saw equity prices drop by around 8%, catching up on recent movements seen elsewhere.

In other currency news, the British Pound was under selling pressure amid concerns around the negotiation of post Brexit trade deals.

US Data Positive

US ISM Manufacturing data released overnight was much better than expected, showing a reading of 50.9 vs market expectations of 48.5. The number was likely supported by the signing of the phase-one US-China trade deal. A reading above 50 indicates expansion in the manufacturing sector, which accounts for 11% of the US economy.

All Eyes on RBA

This afternoon the Reserve Bank of Australia will announce its decision on interest rates. The market sees only a small chance of a 0.25% cut, after a better than expected Australian employment report last week. Probably of more interest will be later in the week when RBA Governor Lowe gives his testimony to parliament and will provide more details around the RBA’s thinking.

The Day Ahead

Outside of the RBA decision, Coronavirus news will continue to be the key focus for markets.