The Kiwi Dollar opens lower today as risk-off sentiment returned to markets overnight. Renewed concerns about the global economy has sparked safe-haven buying, lending support to the Swiss Franc, Japanese Yen, and to the US Dollar. Commodity currencies AUD, CAD, and NZD have all lost ground while equity markets have also fallen sharply overnight.
Tariff Rally Short Lived
The market rally from the White House’s tactical turnaround on Chinese tariffs yesterday has not lasted long with disappointing data contributing to growing worries about the global economy. Weaker than expected data out of China and Germany overnight has contributed to the renewed risk-off sentiment. Chinese retail sales and industrial production were both well below market expectations and reinforced concerns about the Chinese and global economies. German GDP has fallen 0.1% in Q2 with fresh calls for German fiscal stimulus to support the economy. The ongoing protests in Hong Kong and the risk of Chinese military intervention is also contributing to the nervous feeling across markets.
NZD and AUD Both Lower
The Kiwi and Aussie are both lower weighed down by global concerns. Yesterday’s consumer confidence and wage price data out of Australia had little impact on the currency. Focus will turn to this afternoon’s Australian employment data, with markets expecting an unemployment rate of 5.2%.
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