The AUDUSD opens at 0.6859 (mid-rate) and the NZDUSD opens at 0.6415 (mid-rate) this morning.
News that China is granting tariff exemptions for 16 types of American-made products as a sign of goodwill ahead of the next round of trade talks has had a positive effect on global equity markets.
Late yesterday afternoon the Chinese Customs Tariff Commission announced that they would suspend tariffs on 16 types of US goods including a 25% tariff on pharmaceuticals and pesticides for a period of 12-months. The proposed tariffs were due to take effect on 17 September.
The overnight US economic data releases were in line with expectations and as such had little effect on the US dollar.
According to the Commerce Department wholesale inventories rose by 0.2% in July following a 0.1% uptick in June.
The Labour Department reported its producer price index inched up 0.1% in August following on from a 0.2% rise in July.
Currencies continue to consolidate ahead of tonight’s ECB policy meeting with economists divided as to whether or not outgoing ECB President Mario Draghi will reintroduce quantitative easing as part of a comprehensive stimulus package. During the July policy meeting the ECB had amended its forward guidance to clearly signal that it is planning an interest rate cut in the near term. Market expectations are for the Central bank to cut the deposit facility rate by 10 basis points to -0.50%.
Global equity markets are inching higher - Dow +0.5%, S&P 500 +0.44%, FTSE +0.96%, DAX +0.74%, CAC +0.44%, Nikkei +0.96%, Shanghai -0.41%.
Gold prices are little changed trading at $1,495 an ounce. WTI Crude Oil prices are down 2.9% to $55.71 a barrel.
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