XE Morning Update

The NZDUSD opens at 0.6685 (mid-rate) this morning.

The USD weakened into Friday’s close as investors continued to price in interest rate cuts. As of this morning the market is pricing in 50 bps of cuts over the next 2 meetings.

The pricing in of cuts comes after the release of the Fed minutes earlier in the week showed that several voting members judged additional monetary policy accommodation would be warranted in the near term with concerns about global growth continuing to weigh on the US economic outlook.

Both the NZD and AUD also benefited from Friday’s China data which showed China's exports dropped less than expected in June. The General Administration of Customs data showed exports fell 1.3% in June, marginally better than the forecast 1.4% fall.

The key domestic driver for the NZD this week will be tomorrow’s quarterly inflation report, current expectations are for CPI to have increased by 0.6% in Q2

This afternoon’s China data deluge will be the key driver during our trading day.

Global equity markets closed mixed on Friday, - Dow -0.16%, S&P 500 -0.18%, FTSE -0.66%, DAX -0.49%, CAC -0.48%, Nikkei +0.28, Shanghai +0.19%.

Gold prices closed out the week at $1,415 an ounce. WTI Crude Oil prices held steady on Friday, closing at $60.30 a barrel.

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