XE Morning Update

Published: Fri 18 Oct 2019 09:31 AM
The Kiwi opens at 0.6350
As you can imagine Brexit talk has dominated overnight, with the big winners surprisingly being the Kiwi and Aussie. The closer and closer the UK get to a deal, the more the Pound will appreciate. However what is not so widely covered, is that risk currencies like the Kiwi and Aussie also get dragged up as well. If Brexit is navigated cleanly, that takes a huge uncertainty away from the global markets, which coupled with positive news round the Trade War, is enough to get risk currencies rallying. There has been numerous reports out from the UK, with Ireland's DUP party saying they would not support the new Brexit deal. All this makes Saturday very interesting indeed, to see if England will finally leave. Rugby world cup aside though, the UK Parliament meet Saturday to vote on the new deal, so we have very large event risk over the weekend. The Pound will likely open on Monday very differently to where it closes.
The Australians had good data yesterday, with their Unemployment Rate come in lower than expected at 5.2%. This also helped boost the AUD, and we have Chinese GDP at 3:00 PM NZT, which should also move things a touch. However I would expect the moves to be a little muted, as traders will be looking to square their bets before the weekend.
Global equity markets were mixed- Dow +0.23%, S 500 +0.41%, FTSE +0.2%, DAX -0.12%, CAC -0.42%, Nikkei -0.09%, Shanghai -0.05%.
Gold prices rose 0.3% to USD$1,497 an ounce. WTI Crude Oil prices are also up, 0.9% to US$53.75 per barrel.

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