The Kiwi Dollar has traded a narrow range overnight and opens the day just a touch down on yesterday. Most major currencies were also range bound, with the best performer being the GBP, which was up on encouraging manufacturing data. The Canadian Dollar was weaker as the Bank of Canada issued a relatively dovish statement after they left interest rates unchanged at 1.75% overnight.
World Economic Forum
The forum in Davos continued overnight with President Donald Trump launching a fresh attack on the US Central Bank for its handling of the world’s biggest economy. Trump criticized the Federal Reserve and its chairman Jerome Powell for failing to keep interest rates at low levels, saying that the Central Bank raised rates too quickly and has lowered them too slowly. Meanwhile, Trump’s top Economic Adviser Larry Kudlow said that sub-zero yields and aggressive Central Bank practices are “ineffectual,” arguing that they are no substitute for pro-growth fiscal policy.
The Day Ahead
Nothing of note on the local front, but there will be much interest in the Australian employment report due out at 1.30pm this afternoon. Markets will be looking for a guide on the likelihood of an RBA interest rate cut next month, and a lower than expected unemployment rate this afternoon would significantly reduce the chance of further easing. Later tonight we have the ECB interest rate decision with no change expected.
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