Comments from the European Central Bank Pushed the EUR Down - APAC Update

Xe Corporate APAC

March 7, 2019 3 min read

The AUDUSD opened lower at 0.7014 (mid-rate), the NZDUSD opened a little lower at 0.6757 (mid-rate) this morning.

Australian retail sales rose a meagre 0.1% in January, in what is yet another blow to the country's retail sector. Aussie consumer spending has been weighed down by record-high household debt and lethargic wage growth.

EUR Update

The EUR USD sank to a level not seen since June 2017, after the European Central Bank (ECB) changed tack on its tightening plan and postponed its first post-crisis interest rate hike until 2020 and launched a new rounds of cheap loans to banks.

The ECB move was more aggressive than the market anticipated. It underscored how the influences of global trade wars, Brexit uncertainty, and continuing Italy debt concerns have weighed on economic growth across the EU.

The ECB, RBA, US Fed and Bank of Canada have all adopted a more dovish tone towards interest rate hikes recently. Our own RBNZ has not been quite as dovish, although the domestic interest rate markets have priced in at around a 68% probability of a 0.25% rate cut within the next 12 months.

Global Update

There was no front-line data out of the US overnight. However, the closely-watched and influential US non-farm payrolls employment figures will hit the wires in the very early hours of tomorrow morning. Brexit deal malaise continues in advance of next week's meaningful vote, and potential incremental votes if the deal isn't initially passed through congress.

Global equity markets were mostly lower on the day:

Dow -0.8%, S&P 500 -0.8%, FTSE -0.5%, DAX -0.6%, CAC -0.4%, Nikkei -0.7%, Shanghai +0.1%.

Gold prices are flat USD$1,286 an ounce, while WTI Crude Oil prices climbed by 0.9% to US$56.59 per barrel.

Mid-market Rate
AUDUSD0.7013-0.2%NZDUSD0.6757-0.2%AUDEUR0.62720.9%NZDEUR0.60250.7%AUDGBP0.53660.6%NZDGBP0.51620.4%AUDJPY78.25-0.4%NZDJPY75.36-0.4%AUDNZD1.03880.1%NZDAUD0.9623-0.2%GBPAUD1.8632-0.6%NZDCAD0.90900.0% GBPNZD1.9372-0.4%
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