The NZDUSD opens at 0.6575 (mid-rate) this morning.
Following the decision by the RBNZ monetary policy committee to cut the OCR by 25bps and signalling a further interest
rate cut is likely over coming months, the NZD tumbled to fresh multi-month lows trading down to 0.6530 against the USD
before just as quickly reversing and trimming its losses by 50%.
“The Monetary Policy Committee decided a lower OCR is necessary to support the outlook for employment and inflation
consistent with its policy remit.” Although employment is near its maximum sustainable level, the outlook for employment
growth is more subdued and capacity pressure is expected to ease slightly in 2019. Consequently, inflationary pressure
is expected to rise only slowly, according to the accompanying statement. The Reserve bank also cited external
headwinds, including lower global growth as external factors prompting the cut.
A lack of progress in talks between the Government and Labour to break the Brexit deadlock has increased the pressure on
UK Prime Minister Theresa May to step down and seen the British pound once again lose ground against the majors. Time is
quickly running out for the UK to agree on a new Brexit plan and present it to the EU before European elections on the
23rd May.
Trade talk headlines are likely to dominate markets for the rest of the week with Chinese negotiators currently heading
to Washington to resume talks and stave off trump’s threat of higher tariffs on $200 billion worth of Chinese goods.
Global equity markets are mixed, - Dow +0.32%, S 500 +0.20%, FTSE +0.15%, DAX +0.72%, CAC +0.40%, Nikkei -1.46%, Shanghai -1.12%.
Gold prices have edged lower, down 0.3% trading at $1,280 an ounce. WTI Crude Oil prices are retracing yesterday’s fall,
up 1.0% Trading at $62.10 a barrel.
ends