NZDUSD 0.6311 -0.4%
NZDEUR 0.5709 -0.1%
NZDGBP 0.5182 -0.1%
NZDJPY 67.27 0.0%
NZDAUD 0.9383 -0.2%
NZDCAD 0.8394 -0.5%
GBPNZD 1.9294 0.1%
It’s been a rough time of it lately for the NZD, with Business Confidence figures out yesterday doing nothing to help.
The RBNZ Governor Adrian Orr had hoped that with a 50 basis point cut in the OCR, businesses would go out and spend on
cheaper credit, and help prop the economy that way. However the risk to this is that Businesses sit back and think, wow,
if the RBNZ is cutting twice, things must be really bad, lets hold off and see what happens. This leads to a
self-fulfilling situation where everyone talks themselves into a recession. For the record Business Confidence came in
at -52.3, an 11 year low, which also really wont help business confidence. For now 0.6300 is just holding, but the real
test will be the 2015 lows at 0.6200
Speaking of lack of confidence, the Labour party in the UK is talking about a no confidence vote for Boris Johnson.
Still early days, but if this was to proceed and be successful, the Pound reaction would in no way be certain. The
general consensus is Boris is pushing for a no-deal Brexit to be on the table to help the bargaining position, but he is
playing with fire. Were he to lose a no confidence vote, would that then make a deal more likely? There is no definite
answer here, but it merely highlights how messy Brexit could still become.
Out of Australia we have building approvals at 1:30 PM NZT. A fairly volatile data point, however the last 5 months have
been negative to low, so a continuation of this trend will really weigh on the AUD.
Global equity remain mixed, Dow +1.25%, S 500 +1.24%, FTSE +0.98%, DAX 1.18%, CAC 1.51%, Nikkei -0.09%, Shanghai -0.10%.
Gold prices are off slightly sown 0.6% trading at $1,532 an ounce. WTI Crude Oil prices have continued to push higher up
1.9% trading at $56.63 a barrel.
ends