The Kiwi Dollar continued its recent recovery as comments from President Trump once again weighed on the U.S Dollar. Trump criticized Federal Reserve Chairman Jerome Powell for raising rates instead of being the “cheap-money Fed chairman” he wanted. He continued by suggesting that the Fed should do “what’s good for the Country”, and hold off on future rate hikes. Trump also repeated his view that China and Europe were manipulating their currencies. The NZD has now recovered 1.5 cents from its lows earlier in the month. Overnight the latest Global Dairy Trade (GDT) auction saw the overall price index fall by 3.6% from the previous auction a fortnight ago. The index has now fallen in five of the last six auctions. Currency markets largely ignored the results with the NZD maintaining its gains on a weaker USD.
Today sees the release of NZ retail sales data which has the potential to move the currency in either direction. Forecasts are for only a modest gain of 0.4% for the quarter following a 0.1% increase in Q1. However any signs of stronger consumption in the NZ economy could add support to the NZD as it may move the RBNZ to drop its recent cautious tone on interest rates. On the flip side, a weaker number would encourage the RBNZ to keep the OCR at record lows and possibly cut rates at some stage. Data is out at 10.45am this morning.
The news that the UK budget balance posted the biggest surplus for July since 2000 saw the pound push higher against the majors. The Office for National Statistics report showed public sector net borrowing, excluding public sector banks, was in surplus by GBP 2.0b in July well above the expected GBP1.1b and 1.0b greater than the July 2017 surplus.
The AUD was also higher on broad USD weakness, but has slightly under performed vs the NZD, seeing NZD/AUD move higher. The leadership challenge to PM Turnbull only had a passing impact on the AUD.
© Copyright - EncoreFX, 2018.The information in this post is provided for general information purposes only and has been prepared without taking into account any person’s objectives, financial situation or needs and, accordingly, it does not constitute personalised financial advice under the Financial Advisers Act 2008, nor does it constitute advice of a legal, tax, accounting or other nature to any person. Before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. We recommend that investors seek advice from their usual adviser before taking any action. EncoreFX (NZ) Ltd is a registered Financial Services Provider (FSP 461386), and is a licensed derivatives issuer under the Financial Markets Conduct Act 2013. EncoreFX (NZ) Ltd has lodged a Product Disclosure Statement (PDS) for each of our derivatives with the Registrar on 21-Dec-2016. A copy of each PDS is available from us or from the Registrar at www.business.govt.nz/disclose.