The NZD opens back above the .6500 levels this morning on the release of weak US data overnight and as US-China trade tensions increase.
The US Dollar retreated from recent highs as US new home sales fell 6.9% in April, reversing an 11-year high. Manufacturing activity also fell to its lowest level in almost a decade, with the new order measure below 50, with 50 being the threshold between expansion and contraction.
Escalating trade tensions between the US and China has heightened markets expectations for a global slowdown, US global stocks fell sharply along with oil prices. Economists are now increasing the chances of a U.S rate cut by October.
Germany’s Services and Manufacturing Falls
Purchasing managers survey data for Europe came in softer than expected overnight as German manufacturing continues to be weak, as both readings at 44.3 fell below forecasts and a significant drop from April. German IFO survey of business expectations also showed confidence fell to the lowest level in years. Alternatively, French data showed marked private sector expansion at the fastest pace in months. PMI data for the euro area remained subdued, with the reading edging higher to 51.6 from 51.5.
Media Reports UK Prime Minister Will Step Down on June 10
The Pound continued its fall as May faces growing pressure to resign amid reports from media overnight that she will be stepping down by 10th June. May could potentially be handing in her resignation as soon as tonight, with “No-deal” Brexit and Boris Johnson leadership now in focus.
This morning is the release of the NZ Trade Balance report at 10.45am, Japan inflation at 11.30am, and tonight sees UK Retail Sales. European elections also begin this weekend which have been overshadowed by the Brexit crisis.
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