The NZDUSD opens at 0.6327 (mid-rate) this morning.
The NZD has extended this week’s gains as investors price out any chance that the Reserve Bank will cut rates at this
afternoon’s monetary policy meeting.
The NZD still appears to be oversold, down circa 2.0% on the month as of Friday, and could make further gains following
an unchanged result.
The Reserve Bank has cut the cash rate by 75 basis points already this year and given that Q2’s GDP result was in line
with the Central bank’s forecast and ahead of market expectations it is not unreasonable to expect the tone of statement
to be less dovish than August’s announcement while the Reserve Bank assesses the effects of August’s 50 basis point cut
on the economy.
The USD has weakened after the Conference Board reported consumer confidence deteriorated by much more than forecast in
September. The report showed the consumer confidence index plummeted to 125.1 in September following a downwardly
revised 134.2 reading in August. The index had been forecast to edge down to 133.0 from a 135.1 originally reported
reading in August.
The Reserve Bank of Australia are less likely to cut the cash rate at next week’s policy meeting after Governor Philip
Lowe appeared to be more upbeat about the economy than economists had expected. Speaking at Armidale Business Chamber
yesterday evening Gov Lowe said that although GDP growth was stronger in the first half of this year than in second the
Bank expects growth to pick-up in the quarters ahead. The Reserve Bank also expects the tax refunds to be spent over the
coming quarters boosting the flagging consumer spending numbers.
The British pound is higher after the UK Supreme Court ruled that Prime Minister Boris Johnson's decision to suspend
Parliament was unlawful denting hopes that the UK will be able to exit the EU with or without a deal on the 31st
October.
Global equity markets remain mixed, - Dow -0.42%, S 500 -0.63%, FTSE -0.47%, DAX -0.29%, CAC -0.04%, Nikkei +0.22%, Shanghai +0.28%.
Gold prices edged up 0.6% overnight currently trading at $1,525 an ounce. WTI Crude Oil prices have softened overnight
currently down 2.0% trading at $57.09 a barrel
ends