News

RBNZ Remains on Hold, NZD Surges

NZD

The Reserve Bank of New Zealand left the official cash rate unchanged at 1% earlier today, citing that the recent economic data did not warrant any significant change to the economic outlook. The bank stated that employment is around its maximum sustainable level, and inflation remains within the target. However, global trade tensions remain elevated, and business confidence is still low. The RBNZ expressed its readiness to implement further fiscal and monetary policy stimulus if needed. The New Zealand dollar reacted positively to the headlines rising to a high of $0.6348, and the EURNZD dipped to a low of 1.7327.

USD

The dollar index which measures the greenback against a basket of major currencies settled lower yesterday at 98.29 on Trump’s impeachment headlines and soft data. Nancy Pelosi, the Speaker of the United States House of Representatives, has announced a formal impeachment inquiry of President Trump. Trump is being accused by seeking help from the Ukrainian president to defame Joe Biden, the Democratic Party presidential front runner. On the other hand, the CB Consumer Confidence dropped to 125.1, the lowest in three months. However, the dollar continued to be supported by the strong US economic outlook relative to rivals.

Metals

Gold prices extended gains supported by Trump impeachment headlines. The recent political developments in the United States could level up uncertainty which could be in favor of the precious metal. The price of a gold ounce rose to a three-week high of $1535, the price of a silver ounce inched higher to $18.58, and palladium soared to a fresh high of $1678.

Oil

Oil prices continued to close the gap opened following Aramco's attack. The reports stating that the Kingdom of Saudi Arabia will restore its full production sooner-than-expected weighed on oil prices. Moreover, the American Petroleum Institute indicated a rise of 1.4 million barrels in US crude oil stock last week. The West Texas Intermediate crude futures dropped to $56.53, and Brent futures dipped to $62.13. The US Energy Information Administration will report the official oil inventories data later on the day.

Major Economic Events

GMT Country Event Expectation Previous

14:00

US

New Home Sales (Aug)

660

635

14:30

US

Crude Oil Inventories

-0.249

1.058

 
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