XE Morning Update - NZ
The NZDUSD opens lower at 0.6292 this morning.
The USD strengthened mildly overnight, pulling the NZDUSD lower, on renewed optimism about upcoming U.S.-China trade talks.
It was reported that China is open to reaching a partial trade deal with the U.S., but they aren’t optimistic about securing a broad agreement to end the trade war. They would accept a limited deal as long as President Trump does not impose any more tariffs and, in return, China would offer non-core concessions like purchases of agricultural products without giving in on major sticking points.
The US Federal Reserve September monetary policy meeting minutes were released overnight – they cut rates by 0.25% at this meeting. Most participants felt a 0.25% rate cut was necessary to sustain the economy expansion and mitigate downside risks. Some expressed concerns that the markets expect more interest rate cuts than are appropriate, while others preferred a 0.50% cut and pointed out that empirical models showed a notable increase in the likelihood of a recession in the medium term.
The markets continue to forecast further interest rate cuts by the US Fed, with the next meeting scheduled for 30-31 October.
The GBP went on a roller coaster ride overnight. It jumped on reports of a breakthrough on the Irish backstop issue and then gave up its gains as hopes of progress were subsequently dashed.
NZ Food Price Index hit the wires at 10:45am.
Global equity markets were higher on the day - Dow +0.8%, S&P 500 +1.0%, FTSE +0.3%, DAX +1.0%, CAC +0.8%, Nikkei -0.6%, Shanghai +0.4%.
Gold prices rose 0.5% higher to
USD$1,507 an ounce. WTI Crude Oil prices
gained 0.4% to US$52.57 per