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NZD Loses Ground | ECB Leaves Rates Steady

Published October 25, 2019

The Kiwi Dollar opens lower this morning as a slight risk off tone returned to the market. The USD and JPY were both stronger, while the NZD and AUD both lost ground. The British Pound has been the worst performer of major currencies, losing ground on more Brexit related concerns.

USD Slightly Firmer as Data Mixed

The U.S Dollar was generally firmer overnight benefitting from risk off market sentiment. Data released was mixed with US PMI data showing a marginal increase, jobless claims were slightly better than market expectations, but durable goods orders for September were lower than expected. Tonight sees the latest reading of the US consumer confidence index.

ECB Leave Rates Unchanged

The ECB left interest rates unchanged as expected last night, in what was President Draghi’s last meeting in charge. The accompanying comments were somewhat downbeat highlighting continued downside risks. Incoming President Christine Lagarde now takes over and faces a somewhat divided council, with around 1/3 not in favour of the rebooted QE program due to start next month.

GBP Weaker on Brexit Delays

The British Pound was down around 0.6% overnight as Brexit delay concerns weighed on the currency. EU Leaders are discussing whether to grant an extension to the process, with only one week until the UK’s current exit date. Meanwhile, UK Prime Minister Boris Johnson has called for a general election in December, which will be put to the vote in Parliament on Monday, where a 2/3’s majority is required for it to be passed.