The AUDUSD opens at 0.6795 (mid-rate), and the NZDUSD opens at 0.6358 (mid-rate) this morning.
Risk appetite is on the rise helped by growth in China's service sector and news that Hong Kong leader Carrie Lam has withdrawn a controversial extradition bill.
Yesterday afternoon IHS Markit reported China's Caixin composite output index climbed to a 4-month high of 51.6 in August, from 50.9 in July. An increase in the growth rate of new orders which grew at their fastest pace since April, helped push the Services Purchasing Managers' Index to a three-month high of 52.1 in August.
In a televised address Hong Kong’s leader Carrie Lam said her government would formally withdraw the controversial extradition bill in an effort to put an end to the violent protests that have at times brought the territory to a standstill.
US Interest Rate
Pressure is mounting on the Fed to cut rates more aggressively in the short-term with former Fed Chair Alan Greenspan admitting it won’t be long before US Treasury bonds trade at negative interest rates. “You’re seeing it pretty much throughout the world. It’s only a matter of time before it’s more in the United States,” Greenspan said. Mr Greenspan’s comments are in line with a growing number of economist’s who believe the Fed should deliver a 50 basis point cut at their September meeting.
The British pound has continued to strengthen with MP’s now preparing to vote on a proposed snap election, which if voted for will take place on Oct 15th.
The Canadian dollar is advancing much the same way as the AUD did after the Bank of Canada kept its key rate unchanged, while suggesting that the current level of policy stimulus remained appropriate. As widely expected the BoC left its cash rate unchanged at 1.75% and although they continue to monitor global developments they believe their economy is “operating close to potential and inflation is on target”.
Global equity markets have turned positive, - Dow +0.78%, S&P 500 +0.93%, FTSE +0.59%, DAX +0.96%, CAC +1.21%, Nikkei +0.12%, Shanghai +0.93%.
Gold prices are little changed trading at $1,552 an ounce. WTI Crude Oil prices have surged higher up 4.0% trading at $55.98 a barrel.
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