XE Morning Update - June 13, 2019

The NZDUSD opens lower at 0.6571 this morning.

The USD weakened on the release of lower than expected US core inflation figures. This was the 4th consecutive month core CPI numbers, which exclude volatile food and energy costs, have undershot estimates and adds to the growing conviction the US Federal Reserve will lower interest rates in the coming months – market pricing implies an 80% chance of a 0.25% rate cut by the end of July.

The USD reversed direction after President Trump said that he had a “feeling” that a US-China trade deal could be reached, although he again threatened tariff increases (he is the Tariff Man after all).

The net result is a lower NZDUSD, having earlier staged a rally towards 0.6600.

The EUR fell after President Trump said he was considering sanctions over Russia’s Nord Stream 2 natural gas pipeline project (piping Russian gas under the Baltic Sea directly to Germany). Trump also warned Germany on being energy-dependant on Russia, plus he would rather they purchase good-ole US LNG instead.

The GBP dropped after the UK Parliament rejected a move to block a no-deal Brexit, having gained earlier after Prime Ministerial frontrunner Boris Johnson soften his stance on the issue.

There is no data scheduled on the local data calendar today. Monthly employment data from Australia hits the wires this afternoon.

Global equity markets were lower on the day - Dow -0.2%, S&P 500 -0.2%, FTSE -0.4%, DAX -0.3%, CAC -0.6%, Nikkei -0.4%, Shanghai -0.6%.

Gold prices gained 0.4% to USD$1,333 an ounce. WTI Crude Oil prices plunged 4.1% to US$51.14 per barrel, weakened by an unanticipated rise in US crude oil stockpiles and a diminished outlook for global oil demand.

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