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NZD lower as RBNZ veer away from further rate rises

Good morning

 

It was another slow day in the currency markets yesterday, even weaker than expected US durable goods and consumer confidence data couldn’t push the US dollar low enough for GBPUSD to break above 1.2700 and now, after a few failed attempts to push higher, the pair has slipped back to 1.2650.  Similarly, EURUSD struggled to get above 1.0860 and now sits lower at 1.0820, while GBPEUR is 1.1690.

 

There was some excitement overnight in the form of the RBNZ rate announcement.  They did keep rates unchanged at 5.5% but put a less hawkish spin on things, which sent NZD lower, NZDUSD dropped from 0.6175 to 0.6100, AUDNZD moved up to 1.0685 and GBPNZD to 2.0755, both these are currently around 20 pips off those highs but still above pre-RBNZ levels.  There had been some (ANZ) looking for a rate rise this time, they won’t be happy.  AUDNZD was the least affected, largely down to the fact AUD was also under pressure after lower than expected monthly CPI data.

 

US GDP is the key release on the calendar today, an annualised rate of 3.3% is expected.  This is followed by several Fed officials, I’d be surprised if they offered anything other than the usual rate cuts at some point but not right now’.  We do hear from BoEs Mann this afternoon, she’s usually hawkish but has recently suggested she might move away from calling for additional rate rises. 

 

Bitcoin has pushed higher, trading around $59,000 having started the week nearer $50,000 and having been as low as $38,500 in January.  As you know I am no fan of the crypto world, call me old fashioned but I really do not see any reason for its use unless for less than fully legal purposes.  Self-fulfilling seems to describe it. Mind you I’ll loathe it even more when it hits $500,000 and I don’t own any of it.  I just cannot bring myself to get involved, a decision I may possibly one day regret.

 

In other news, I see Apple are winding down their plans to build an electric car, moving some staff to an AI project.  Electric car firms have seen slowing demand recently, Tesla recently said 2024 would see slower sales growth than 2023, Ford and GM have postponed plans to expand EV production and other car firms are altering their future plans, with some who previously said they will move away from combustion cars completely now changing their mind.  Cost seems to be a key factor, electric vehicles are expensive, although you do get comparatively good performance for your money.  With Chinese car makers seemingly able to sell decent electric vehicles at lower prices, Western firms struggle to keep up. 

 

Man City looked strong as they beat Luton last night in the FA cup. Mark’s Leeds take on Chelsea this evening in their FA cup tie as they hope to get into the quarter finals. 

 

That’s all for now.  After a slow start to the week, the rest could be a bit busier, with some heavy weight US economic data on the calendar, including PCE deflator tomorrow and ISM manufacturing PMIs Friday.  Enjoy the day, the weather has been dry here for a few days but the forecast suggests that’ll change, with rain on the way until we are well into March.  Lovely.  

 

-  10.00 EU consumer confidence

-  13.30 US GDP, PCE

-  16.30 BoEs Mann speaks

-  18.00 Feds Bostic speaks

-  18.15 Feds Collins speaks

-  18.45 Feds Williams speaks

-  23.50 Japan retail trade

-  00.30 AUS retail sales

 

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