NZ Dollar Slumps Amid Short Odds of an RBNZ Rate Cut

. 2 min read

The AUDUSD opens at 0.6841 (mid-rate) and the NZDUSD opens at 0.6331 (mid-rate) this morning.

This afternoon the RBNZ are at short odds to cut the OCR by 25 basis points, after yesterday’s survey of 2-year inflation expectations showed expectations have inched down from 1.86% in Q3 to 1.80% in Q4.

The NZD retraced Monday evenings rise following the data release and this morning finds itself back at this weeks’ opening levels.

The AUD continues to lack direction and has again traded sideways over the past 24-hours with investors looking to this morning’s quarterly wage price data release ahead of tomorrow’s employment report for direction.

Current expectations are for the wage price index to have risen by 0.5% over the quarter in the three months to September and by 2.3% on an annual basis. Anything shy of this result is likely to place further pressure on the Reserve Bank to cut the OCR at their December meeting.

The British pound has also given back some of its earlier gains after the Brexit Party leader Nigel Farage rejected Boris Johnson’s calls to stand down candidates in Labour-held seats in the general election. The Brexit Party are planning to contest about 300 labour held seats and are now wanting the Tory Party candidates in some of these areas to stand aside.

There was better news for the Euro overnight with German economic confidence strengthening to a six-month high in November. According to ZEW their economic sentiment indicator rose -2.1 in November, sharply up from October’s -22.8 reading.

Global equity markets have pushed higher - Dow +0.15%, S&P 500 +0.24%, FTSE +0.50%, DAX +0.65%, CAC +0.44%, Nikkei +0.81%, Shanghai +0.17%

Gold prices are marginally lower trading at a new 3-mth low of $1,453 an ounce. WTI Crude Oil prices are unchanged at $56.96 a barrel.

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