The Kiwi opens at 0.6557
It has actually been very resilient given that the major news overnight was an unexpected announcement from Trump saying
that he is putting a 10% tariff on a further 300 Billion of Chinese Exports. This is due to get enacted on September the
1st. This announcement does not bode well for trade talks, and is seen as a further escalation in the Trade War. This
has led to a widespread risk-off move across the board, with safe havens like the Japanese Yen and Gold benefitting the
most. Oil prices were down over 7%, which gives an indication to how seriously the market has reacted.
As you would imagine with Australia having more exposure to China, the AUD has fared less well than the Kiwi, down at
least 0.5% against all its major trading partners. If we ignore the brief flash crash this January, the AUD is trading
at the lowest level against the USD since 2009. For now the 0.6800 level seems to be holding, but we are not far off
stop/panic selling if that breaks.
We have Australia Retail Sales out at 13:30 NZT, and US Non-Farm Employment Change overnight. Usually these would be
closely watched, but given the backdrop, sentiment (and Trumps twitter feed) will most likely be more market moving.
Global equity markets are lower, Dow -0.71%, S 500 -0.63%, FTSE -0.03%, DAX +0.53%, CAC +0.70%, Nikkei +0.09%, Shanghai -0.81%.
Gold prices are coming in very strong, up 2.6 to $1,455 an ounce. WTI Crude Oil prices plunged, down 7.2%, trading to $54.43 a barrel.