The Kiwi Dollar opens higher this morning, continuing its recent run as the U.S Dollar made broad losses after dovish comments from NY Fed President John Williams overnight. The Kiwi had also made ground yesterday afternoon, catching a ride higher with the Australian Dollar which rallied after yesterday’s employment report.
USD Falls on Fed Official Speech
Dovish Comments from NY Fed President Williams has boosted the odds of a 0.5% U.S interest rate cut. Williams surprised markets a few hours ago suggesting that the Fed needs to be thinking about aggressive easing despite increasing economic data evidence of a stabilizing economy. He said “when you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress”. The USD immediately lost ground after the speech, and has fuelled speculation that the Fed might move more aggressively and cut rates by 0.5% at the end of the month.
Aussie Gains After Employment Report
The AUD made ground yesterday as labour market data came in around market expectations. The unemployment rate was steady at 5.2% for the third month in a row, and there was nothing in the report to indicate that the RBA would need to make a third monthly consecutive rate cut. The Aussie found support on this basis and dragged the NZD higher with it.
Pound Bounces Back
The British Pound bounced back after recent losses as reduced Brexit concerns and a better than expected UK retail sales number for June both boosted the currency.
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