XE Morning Update November 1, 2019

NZDUSD 0.6406 0.5%
NZDEUR 0.5749 0.6%
NZDGBP 0.4951 0.4%
NZDJPY 69.17 0.0%
NZDAUD 0.9304 0.6%
NZDCAD 0.8436 0.7%
GBPNZD 2.0195 -0.4%

The NZD opens up at 0.6406

The Market was still digesting news from the Fed cutting yesterday morning, with both the NZD and AUD higher. Powell’s statement after was widely interpreted as the Fed needing a large increase in inflation before raising rates again, while not necessarily needing much more weakness for another cut. Therefore the market has seen this is a bit of a one way bet against the USD. The caveat here, and where we sit at the moment, is that the Fed are cutting rates for a reason, because the economy and inflation is not where they want it, and there are clouds on the horizon. When it starts raining though, is a bit harder to forecast.

What is especially relevant for the Kiwi, is the future path of the RBNZs interest rates, and this will need to be confirmed to really get a sustained bounce. The chance for a cut out of the RBNZ on the 13th November was “100%”. This has dropped to 50% currently. If this drops further, and the thought pattern is RBNZ on hold, Fed hold/cutting, then we could see us break out of the doldrums. More exciting than All Blacks Wales at least anyway.

We have employment data out of the States overnight, and as ever this will be closely watched by the market and Fed alike.

Global equity markets remain mixed, - Dow -0.89%, S&P 500 -0.66%, FTSE -1.12%, DAX -0.34%, CAC -0.62%, Nikkei +0.37%, Shanghai -0.36%

Gold prices are higher, up 1.5% trading at $1,515 an ounce. WTI Crude Oil prices have come off, down 1%, trading at $54.12 a barrel.

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