The Australian dollar is the best performing currency overnight due to growing trade optimism and the RBA holding interest rates.
RBA Holds Interest Rates at Record Low 0.75%
The AUD rose to 6-week highs against the NZD and USD following the Reserve Bank of Australia holding interest rates at the record low 0.75% yesterday as widely expected. RBA Governor Philip Lowe said the three rate cuts have helped the rebound in housing values and showed a strengthening economy. Lowe commented “The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed.” Markets are pricing in a 60% chance of a rate cut to 0.50% by March.
US Non-Manufacturing Sector Rises in October
The USD rose when the US Institute for Supply Management released their economic activity report on the non-manufacturing sector, showing it grew in October for the 117th consecutive month. It increased to 54.7 from 52.6 and above forecasts of 53.5. Business activity, new orders and employment also rose. The data fits with the Federal Reserve’s recent comments that the economy is in a good place.
NZ Dairy Auctions Prices Rise, Volumes Fall
This month’s Global Dairy Trade auctions showed an increase in whole milk prices while volumes dropped. The GDT price index rose 3.7%, with an average selling price of $3,466 per tonne, the index rose 0.5% in the previous sale. The result helped pare back some of the losses following the US upbeat data.
Locally we have our employment data release at 10.45am with a pick-up in the unemployment rate forecasted at 4.1%, up from the previous months 3.9% and wages expected to hold steady.
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