By Dan Bell
The NZD opens heavily down at 0.6617.
The RBNZ held the OCR steady at 1.75% yesterday, but it was Adrian Orr’s following comments that has seen the NZD consistently sell off. He said he expected to keep the OCR where it is until Q4 2020, which was about a year longer than the market had anticipated. He did however point to the number one downside risk to GDP as being poor business confidence. This therefore makes one wonders if he is merely trying to shore confidence up, and such a late hike can be taken with a grain of salt.
From a technical perspective though, it also does not look good. The 0.6700/0.6715 level has cleanly broken to the downside, and the next major support is the 2015 low 0.6200.
Looking more short term, we have the RBAs Monetary Policy Statement out at 1:30 pm. Although these have not been too market moving lately, the Australian fundamental story is relatively similar to NZ, and a dovish tilt could just be enough to push the AUD over the edge.
UK GDP Rounds off a busy day at 8:30 tonight.
Excluding the Shanghai Composite, global equity markets are flat, – Dow -0.14%, S&P 500 +0.00%, FTSE -0.45%, DAX +0.34%, CAC +0.01%, Nikkei -0.20%, Shanghai +1.83%.
Gold prices are higher, up 0.7% trading to $1,220 an ounce. WTI Crude Oil prices have bounced a touch, up 1.2% trading at $66.77 a barrel.
Current indicative rates:
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »