The New Zealand dollar weakened against other major currencies following the Reserve Bank of New Zealand policy meeting. The bank left the official cash rate unchanged at 1.75% while signaling that the next move could be to the downside due to the weaker global economic outlook. The OIS market is now pricing in an interest rate cut in August 2019 versus June 2020. The NZDUSD fell to a two-week low of $0.6793, and the EURNZD spiked to a one-week high of 1.6582.
The dollar index which measures the greenback against a basket of major currencies extended gains and rose to a two-week high of 96.98 as rivals tripped. The growing uncertainty over Brexit and the drop in German bund yields following soft economic data weighed on both the pound and euro which account almost 70% of the dollar index basket. The USDJPY rose to a high of 110.71, and the EURUSD declined to a low of $1.1247.
Precious metals dropped as the dollar strengthened and treasury yields were off the lows. The price of a gold ounce slipped to a low of $1313, the silver ounce fell to $15.33, and palladium declined to $1500.
Oil prices rallied towards a four-month high as OPEC+ led supply-cut continues to offset the effects of a softer global economic outlook on oil prices. On the other hand, the American Petroleum Institute reported that the US weekly crude oil stock rose by 1.930 million barrels last week. Market participants await the official numbers by the Energy Information Administration later today. The West Texas Intermediate crude futures climbed to a high of $60.36, and Brent futures advanced to a high of $68.26.
Major Economic Events
|12:30||US||Trade Balance (Jan)||-57.00||-59.80|
|12:30||CA||Trade Balance (Jan)||-3.50||-4.59|
|14:30||US||Crude Oil Inventories||-1.200||-9.589|
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.