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XE Morning Update

The NZDUSD opens at 0.6259 (mid-rate) this morning.

The NZD continued to encounter heavy selling pressure on Friday with the dollar falling to a new multi-year low against the USD.

The NZD along with other commodity linked currencies underperformed as optimism surrounding US-China trade talks faded.

News that the Chinese trade delegation who were in Washington for deputy-level trade talks, had cancelled a scheduled visit to US farm states, and were returning to China early led to the increase in risk aversion. In response to the news President Donald Trump announced that he is not interested in a "partial or interim deal” and told reporters he doesn't think he needs to reach a trade deal with China before the 2020 elections.

The EUR moved higher on Friday night after preliminary data from the European Commission showed eurozone consumer confidence improved in September to its highest level in four months. The flash consumer confidence index which had fallen to -7.1 in August rose to -6.5 in September, its highest level since May of this year.

The key driver for the NZD this week will be the tone of Wednesday’s monetary policy statement. Given that the RBNZ surprised the market with a 50bp cut at there last meeting, and that tis cut will take time to filter through the economy it is unlikely we will see another adjustment to the rate at Wednesday’s meeting.

Global equity markets closed mixed on Friday, - Dow -0.59%, S&P 500 -0.48%, FTSE -0.16%, DAX +0.08%, CAC +0.56%, Nikkei +0.16%, Shanghai +0.25%.

Gold prices edged up 0.7% on Friday closing out the week at $1,516 an ounce. WTI Crude Oil prices were down 0.8% on Friday, closing out the week at $57.84 a barrel.

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