EncoreFX’s daily market updates are written by our experienced and professional dealing team.
The Kiwi Dollar continues to trade at the bottom end of its recent range and begins the day at similar levels to yesterday. The USD remains firm against most major currencies, while US equities recovered some of yesterday’s losses, gaining more than 1%. Better earning results from some big names such as Microsoft and Tesla eased some of the recent concerns over economic growth.
The NZ trade deficit widened to more than $5b as expected yesterday, with import numbers continuing to surge. The number had little impact on the currency, as it was not considered to be a sign of economic weakness with export growth remaining solid.
Signs are emerging that the U.S economy could be cooling off after impressive growth over recent months. Overnight data sent mixed signals with US advanced trade in goods worse than expected in September, while durable goods orders were ahead of market expectations but down on the previous months number. The big event over the next 24 hours is tonight’s US GDP number. Markets are expecting an annualized growth number of 3.3%, and anything significantly outside of this is sure to create some volatility and will have an impact on the NZD.
There was no policy change from the European Central Bank, with the latest interest rate decision made earlier this morning. The policy guidance was unchanged with the Bank still on track to end its quantitative easing program at the end of the year, despite recent weak data and concerns over Italy’s budget. President Draghi surprised some analysts as he sounded a little more hawkish than expected, which saw the EUR initially make ground before falling back later in the day.
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