US Debt Deal, a New UK Conservative Leader and the NZ Dollar Weakens in Busy 24 Hours

Xe Corporate APAC

July 23, 2019 2 min read

The AUDUSD opens at 0.7005 (mid-rate) and the NZDUSD opens at 0.6705 (mid-rate) this morning.

US News

News that President Trump and congressional leaders agreed a two-year US debt ceiling and budget deal yesterday morning has seen the USD outperform overnight.

The deal which will raise US discretionary spending to $1.37 trillion in fiscal year 2020, up from $1.32 trillion this year will reduce the threat of debt default and automatic, across-the-board spending cuts, as well as alleviating the threat of a government shutdown when funding expires after 30 September.

New Zealand News

The NZ dollar is the weakest performing of the G10 currencies after a Bloomberg report said the RBNZ was contemplating how it would implement "unconventional" monetary policy measures such as quantitative easing. The report comes ahead of next month’s monetary policy statement when the RBNZ are tipped to follow other Central banks and reduce the OCR by a further 25bps to 1.25%.

UK News

The news that Boris Johnson has been confirmed as the new Conservative Party leader and UK Prime Minister has seen the British pound push higher. Michel Barnier the European Union's Chief Negotiator immediately announced that he is looking forward to “working constructively with PM Boris Johnson when he takes office, to facilitate the ratification of the Withdrawal Agreement and achieve an orderly Brexit.”

Global equity markets are benefiting from reports that US officials are about to head back to Beijing to resume face-to-face trade talk negotiations.

Global equity markets have turned positive - Dow +0.55%, S&P 500 +0.53%, FTSE +0.56%, DAX +1.64%, CAC +0.92%, Nikkei +0.95%, Shanghai +0.46%.

Gold prices are marginally lower trading at $1,419 an ounce. WTI Crude Oil prices have inched higher, up 0.7%, trading at $56.75 a barrel.

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