The NZD opens at 0.6665 this morning.
Broad USD weakness has been seen in the markets since yesterday. This was mainly due to the Federal Reserve Chairman
Jerome Powell’s signal to cut the interest rate later this month. During his testimony to the House Financial Services
Committee, Powell expressed a concern for notably slowing business investments across the country and uncertainties of
the economic outlook amid trade tensions and sluggish global economy.
Market expectations for a July rate cut are now at 100%. Out of this, approx. 70% is priced in for a 25 bps cut. As a
result equity markets rallied with Dow Jones Industrial Average posting above 27,000 for the first time in history.
US June CPI, a key measure of inflation, was released overnight and rose more than expected with their core index having
achieved the largest gain in nearly 1.5 years. The UST 10-year yield posted a considerable gain overnight at 2.12% on
the back of the core inflation data. This, however, has had little impact on market expectations that the Fed will cut
their interest rates at the next FOMC meeting.
US Unemployment claims decreased to 209K while 220K had been expected.
Today the NZD is likely to be moved by Chinese Trade Balance and NZ Manufacturing Index.
Oil prices are up today at US$ 60.50 with the Brent benchmark at US$ 66.50 due to a rising stockpile and a storm in the
Gulf of Mexico affecting the production. Gold price is down at US$ 1,407.
ends