XE Morning Update - May 8, 2019
The NZDUSD opens at 0.6605 (mid-rate) this morning.
Global equity markets are down sharply with US equities suffering their steepest fall of the year with President Trump’s tariff threat dominating the headlines.
Yesterday afternoon US Trade Representative Robert Lighthizer confirmed the US are planning to raise tariffs on $200 billion worth of Chinese goods to 25% on Friday. With many investors believing Trump’s tweet was just a negotiating tactic, the confirmation of the Friday deadline by Mr Lighthizer has sparked this latest equity sell-off.
The Australian dollar spiked higher late yesterday but has been unable to maintain its gains overnight. The spike in the dollar came after the RBA maintained its current cash rate against expectations of a possible 25bps cut. In the accompanying statement the reserve hinted that further improvement in the labour market will be required to lift inflation back towards its target and prevent a cut to the rate later this year.
Today local investor attention will be on this afternoons RBNZ Monetary Policy Statement due for release at 2:00pm. In mirroring Australia, the decision to hold or cut the OCR by 25bps remains a line call with a spike in volatility assured no matter which way the decision goes. Today’s decision will be the first under the new 7-member committee so the breakdown of the vote will also be of interest.
Global equity markets are down sharply, - Dow -2.01%, S&P 500 -1.85%, FTSE -1.75%, DAX -1.58%, CAC -1.60%, Nikkei -1.51%, Shanghai +0.69%.
Gold prices are inching higher, up 0.2% trading at $1,284 an ounce. WTI Crude Oil prices have slipped lower, down 1.7% Trading at $61.46 a barrel.