XE Morning Update - August 1, 2019

NZDUSD 0.6558 -0.8%
NZDEUR 0.5923 -0.1%
NZDGBP 0.5395 -0.7%
NZDJPY 71.32 -0.7%
NZDAUD 0.9592 -0.3%
NZDCAD 0.8656 -0.5%
GBPNZD 1.8536 0.7%

In line with market expectations the Federal Reserve earlier this morning cut their target range for the federal funds rate by 25 basis points.

The Fed referred to the cut as a “mid-cycle adjustment” citing “muted inflation” along with “global developments” as factors for easing monetary conditions.

The FOMC also decided to end its balance sheet reduction with immediate effect two months earlier than expected.

The US dollar moved higher and US equity markets fell sharply after the Fed stated the cut “isn’t the start of a lengthy cycle” denting investor expectations of further rate cuts over the next 12-months.

During the following press conference Mr Powell when questioned if this move was a “one and done” made it clear that Fed will continue to monitor economic data and are prepared to cut rates further if they feel it is warranted.

Trade talks between the US and China concluded without any significant progress with negotiators scheduling further talks to take place in the US in September.

Global equity markets remain mixed, - Dow -0.29%, S&P 500 -0.24%, FTSE -0.57%, DAX +0.34%, CAC +0.14%, Nikkei -0.86%, Shanghai -0.67%.

Gold prices are down 0.8% trading at $1,418 an ounce. WTI Crude Oil prices are inching higher, up 0.5% trading at $58.63 a barrel.

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