The NZD opens relatively flat today with little data out overnight.
NZ Services Sector Activity Gets A Bounce
The BNZ BusinessNZ performance of services index (PSI) received a bounce in May, but still remains below the long-term average of 54.4. The PSI increased 1.6 points in May from April to a seasonally adjusted 53.6. A reading above 50 indicates expansion. May’s PSI indicates a slowing services sector and markets will now look ahead to Thursday’s GDP data with economists expecting 0.6% growth in the first quarter of the year.
US Business Conditions Fall
The USD fell under pressure after the New York Federal Reserve’s Empire State business conditions index declined in June, tumbling into a negative read for the first time in more than two years. Headline general business conditions index plummeted by twenty-six points, the largest monthly decline on record to -8.6. New orders retreated while shipments increased modestly.
Markets largely brushed this off as focus remains on the Federal Reserve rate announcement on Thursday morning with markets expecting the Fed to keep rates on hold and will be watching for an indication on future rate cuts.
Pound Falls as Boris Johnson’s Lead Rises
Boris Johnson received a boost in his campaign to replace British PM Theresa May when one of his previous rivals and EU supporter Matt Hancock backed him, commenting “he was almost certain to win the contest”. Boris has promised to lead the UK out of the EU with or without a deal, however parliament has indicated it will try to stop a no-deal Brexit which would lead to further chaos and uncertainty.
RBA Meeting Minutes will be released this afternoon following their recent rate cut earlier in the month
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