Markets have had a small sense of stability about them overnight with equity prices rising off record lows, and the price of oil jumping by over 20%. Global policy makers have thrown all they can at the coronavirus crisis, with the world’s richest nations pouring in unprecedented amounts of financial aid into the global economy. National border closures have become the latest measure to fight the outbreak, with New Zealand announcing a border lockdown last night.
In currency markets the USD has continued to remain in favour against most currencies. The Kiwi Dollar has had a rocky ride over the past 24 hours falling by over 2 US cents yesterday afternoon, but has recovered a lot of that ground overnight.. The higher price of oil has helped the Australian Dollar claw back some ground overnight, however not a big impact on the NZD/AUD cross rate which is only slightly lower and continues to trade near parity. On the other NZD cross rates, some good gains against the EUR and JPY after recent heavy falls.
RBNZ Supports Financial Markets
The RBNZ announced this morning that it is actively involved in financial markets to ensure smooth market functioning despite the global uncertainty from COVID-19. Regular market operations continue to ensure there is ample liquidity in the financial system.
Europe Provides Support
The European Central Bank made a move yesterday afternoon announcing an expanded EUR750 billion Quantitative Easing program to last until at least the end of the year. Meanwhile In the UK, the Bank of England cut rates by 15bps to 0.1%, and like the ECB also announced an expanded QE program.
RBA Cuts Rates
The RBA cut its cash rate from 0.5% to 0.25% yesterday afternoon as expected. It also announced a QE program, saying it would buy further government bonds.
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