The USD Dropped After The US Federal Reserve Meeting Minutes - APAC Update

. 3 min read

The AUDUSD opens higher at 0.7169 this morning, and the NZDUSD opens higher at 0.6763 this morning.

Yesterday afternoon, RBA deputy governor Guy Debelle delivered a speech on the state of the Australian economy. Whilst he acknowledged some challenges, he still expected decent growth in the Australian economy. Given this, it is unlikely we will see a rate cut from the RBA near-term. Prime Minister Scott Morrison is expected to announce the Federal election will be held on Saturday 18th May.

The NZDAUD has traded to an 11-week low of 0.9430 as the market further prices in expected rate cut from the RBNZ, while the RBA sits pat for now at least.

US Update

The USD declined, pushing the NZDUSD higher, after the US Federal Reserve meeting minutes confirmed the central bank’s thinking was now tilted more towards cutting interest rates rather raising them as they had been gradually doing the past 2 years.

The Fed saw the US economy weathering a global economic slowdown, but they made it clear they saw no recession for the United States in the next few years.US CPI (consumer price inflation) figures were released prior to the Fed minutes. The headline CPI increased by the most in 14 months in March, although the underlying inflation trend remained subdued amid slowing US and global economic growth. These figures help to reinforce the Fed’s current stance on interest rates.

Europe Update

The European Central Bank (ECB) maintained its ultra-easy monetary policy stance overnight and was giving recent stimulus measures time to work their way into the economy in an attempt to counter spreading global economic blues.

The GBP strengthened overnight, but remained within recent ranges. The EU is expected to grant the UK another Brexit delay but may force them to accept a longer extension than currently proposed, and with some strings attached.

Global equity markets were mixed on the day - Dow -0.0%, S&P 500 +0.3%, FTSE -0.1%, DAX +0.5%, CAC +0.3%, Nikkei -0.5%, Shanghai +0.1%.Gold prices were flat at USD$1,298 an ounce. WTI Crude Oil prices rose 0.8% to US$64.58 per barrel.

Mid-market Rates

AUDUSD 0.7169 0.6% NZDUSD 0.6763 0.3%
AUDEUR 0.6360 0.6% NZDEUR 0.5997 0.2%
AUDGBP 0.5478 0.4% NZDGBP 0.5164 0.0%
AUDJPY 79.57 0.5% NZDJPY 75.03 0.1%
AUDNZD 1.0603 0.3% NZDAUD 0.9433 -0.3%
GBPAUD 1.8255 -0.4% NZDCAD 0.9008 0.3%
      GBPNZD 1.9365 0.0%

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