The Kiwi Dollar has traded a narrow range overnight as markets started the week quietly due to the Presidents Day holiday in the U.S. Coronavirus developments continue to be the main force driving markets and sentiment was given a boost yesterday after a policy easing by Chinese authorities as they look to support their economy in the face of the virus.
China Cuts Rates
The People’s Bank of China cut its medium term interest rate yesterday to cushion the economy from the coronavirus epidemic. The PBOC offered 200 billion Yuan of 1 year loans with the interest rate lowered by 10 basis points to 3.15%. The easing follows comments from Finance Minister Kun over the weekend who said China would implement “targeted and phased” cuts to taxes and expenses for businesses.
Euro Continues to Struggle
The Euro remained near 3 year low levels as investors continued to worry about weakening growth in the region. Ongoing fears around the coronavirus impact on the Eurozone economy remain in place and data releases due later in the week are not expected to ease those concerns.
The Day Ahead
Fairly light on economic data with the main NZ focus being on Global Dairy Auction results to be released overnight. Across the ditch we have the release of minutes from the RBA’s February meeting, however no surprises are expected given Governor Lowe’s speech and parliamentary testimony last week.
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