Kiwi Tumbles as RBNZ Shifts to Dovish Stance

NZD

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.

USD

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.

Metals

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                                                                                    

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

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