XE Morning Update - NZ

NZDUSD 0.6285 -0.2%
NZDEUR 0.5696 -0.2%
NZDGBP 0.4919 -1.8%
NZDJPY 68.40 0.2%
NZDAUD 0.9306 0.1%
NZDCAD 0.8297 -0.4%
GBPNZD 2.0329 0.0%

The NZDUSD opens lower at 0.6285 this morning.

The GBP was the big mover overnight. The GBPUSD surged to a 5-month high as the UK and European Union are reportedly closing in on a draft Brexit deal. The NZDGBP fell to 0.4915 – a level last seen 12 months ago.

The USD gained overnight, hurting the NZDUSD in the process, as optimism over any substantive trade deal between US & China continues to fade.

The NZDUSD fell to an overnight low of 0.6259 before bouncing back when the latest instalment of Fonterra’s Global Dairy Trade gained 0.5% from the previous auction. The key Whole Milk Powder price was unchanged.

The International Monetary Fund (IMF) made a 5th straight cut to its 2019 global growth forecast. It cited a broad deceleration across the globe’s largest economies as trade tensions continue to hinder expansion.

Domestic market attention will be firmly placed upon NZ’s 10:45am Q3 CPI release. Expectations are for a +0.6% increase in the quarterly inflation rate, and these figures will assist the RBNZ in deciding whether to cut the Official Cash Rate again on 13th November. The interest rate markets have largely priced in a 0.25% rate cut for this meeting.

Global equity markets were higher on the day - Dow +1.1%, S&P 500 +1.2%, FTSE -0.0%, DAX +1.2%, CAC +1.1%, Nikkei +1.9%, Shanghai -0.6%.

Gold prices dropped 0.7% to USD$1,481 an ounce. WTI Crude Oil prices fell 0.9% to US$52.87 per barrel.

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