The Kiwi surged 1.3% higher overnight on news of New Zealand’s Government’s significant fiscal stimulus package and helped by weaker USD manufacturing data.
The NZD hit 3-month highs overnight against the USD and AUD following reports from NZ Finance Minister Grant Robertson promising over the weekend to boost the economy with an infrastructure cash injection and further supported by New Zealand’s terms of trade in September coming in at a hefty 1.9%, due to a pick-up in export prices. Import prices however came in flat.
USD Falls on Weak Factory Activity
The USD dropped after a weaker than expected ISM manufacturing survey, which fell to 48.1 in November missing forecasts of 49.2 and down from September’s 48.3.
Also in the US, President Trump announced that he will immediately reinstate tariffs on steel and aluminum imports from Brazil and Argentina. Trump suggested that the two countries are purposely devaluing their currencies in order to gain an economic advantage. In typical Trump fashion, the US President also took the opportunity to repeat his disdain for the Fed and their monetary policy stance.
Australia Data Disappoints Ahead of RBA Rate Announcement
In Australia, data disappointed with November building approvals down a massive 8.1%, while company profits fell along with productivity.
The Reserve Bank of Australia meet this afternoon with expectations for rates to remain on hold at 0.75%, however comments are expected to be more Dovish from Governor Lowe and markets expecting a rate cut to 0.5% in February 2020.
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