The AUDUSD opens at 0.6985 and the NZDUSD opens at 0.6676 - both open higher this morning.
The Kiwi dollar gained across the board yesterday after the RBNZ left the Official Cash Rate on hold at 1.50%, despite stating the further interest rate cuts are likely. They highlighted downside risks to the inflation target and sustainable employment and it certainly appears the RBNZ will be in a position to lower the OCR at its next meeting on 8th August.
Overnight, the NZDUSD traded to 2-month high of 0.6690, the NZDAUD touched 0.9575 – a level last seen 3rd April, while the NZDGBP hit 0.5275 – a 3-month high. The NZDEUR, NZDJPY, and NZDCAD all traded to 2-week peaks.
Across the ditch, with little happening locally, the AUDUSD was dragged higher by its trans-Tasman cousin. Following the RBNZ's indication that further rate cuts are likely, the Kiwi rallied, with buying spilling over to the Aussie dollar. AUDUSD traded to 0.6993 overnight, a level last seen 16 days ago. The AUD rose 0.3% against the EUR and GBP and by 0.9% versus the JPY.
The global markets are now focusing on the G-20 meeting this week, with emphasis on the side meeting between the US and China in the hope they can make headway in resolving their trade dispute. Adding a little spice was President Trump when he once again threatened substantial addition tariffs if a deal can’t be reached.
The GBP weakened after Boris Johnson, the top pick to be the next British Prime Minister, reaffirmed his desire to take the UK out of the EU with or without a deal by the current 31 October deadline.
Global equity markets were generally little changed on the day - Dow +0.1%, S&P 500 0.0%, FTSE -0.1%, DAX +0.1%, CAC -0.3%, Nikkei -0.5%, Shanghai -0.2%.
Gold prices dropped 0.9% to USD$1,410. WTI Crude Oil prices jumped 2.5% to US$59.22 per barrel, buoyed by an outage at a major US refinery and industry data that showed crude inventories were at lower levels than forecast.
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