NZDUSD 0.6658 -0.7%
NZDEUR 0.5974 -0.8%
NZDGBP 0.5348 -0.4%
NZDJPY 72.38 -0.2%
NZDAUD 0.9583 -0.3%
NZDCAD 0.8763 -0.6%
GBPNZD 1.8692 0.4%
European Central Bank (ECB) kept their benchmark interest rates unchanged but left its door open to further cuts down
the track. The Governing Council of the central bank stated their interest rate would remain “at the present or lower
levels” at least until the first half of 2020.
ECB President Mario Draghi said that “a significant degree of monetary stimulus continues to be necessary to ensure that
financial conditions remain very favourable and support the euro area expansion”. He stated that the central bank is
intending to explore further monetary easing and despite heavily anticipated rate cut at their policy meeting, he did
not provide much details on asset purchase.
EUR had briefly fallen to a 2 year low against the USD before gaining some points back while Draghi was speaking. Equity
markets fell on the disappointing word by Draghi and mixed corporate earnings.
The Reserve Bank of Australia Governor Philip Lowe had a speech yesterday and said Australia’s central bank is prepared
to ease their monetary policy further if deemed necessary. He said “if demand growth is not sufficient, the Bank is
ready to provide additional support by easing the policy further”. The RBA cut their rate by 25 bps each in June and
July and the expectation for the further cut had been less inclined but his comment yesterday put further cuts back in
spotlight and AUD fell on the back of it.
Volatility is expected to pick up next week as all eyes will be on US Fed’s rate decision in which 25 bps cut is
expected. The week will also end with US non-farm payroll with Unemployment rate. The following week will see RBNZ and
RBA interest rate decision amid central banks globally easing their monetary policy.
Global equity markets broadly turned negative overnight with Dow -0.47%, S & P 500 -0.53%, FTSE 100 -0.17%, DAX -1.28%, CAC -0.50%, Nikkei +0.22%, Shanghai +0.48%.
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