The greenback extended gains once again in the NY session as US stocks rallied while oil trended lower. Equities managed to eke out a 0.6% gain despite terrible earnings from a major US investment house. Oil meanwhile ignored worse than expected inventory numbers -- which showed a -5.8M draw in the latest week -- and sank about $1 towards a close just under the $103 mark.
EUR/USD charted new territory by sinking below the 1.40 mark for the first time in nearly one year. The pair plunged about -95 pips in the session towards a close right around the 1.40 area -- and sank towards 1.3970/60 just after the NY close. GBP/USD fell just -25 pips to a close near 1.7530. USD/JPY was helped higher by the decent performance in the equity markets and jumped about 30 pips towards the 107.70 mark. USD/CAD traded mostly sideways as oil got thrown around all session, but managed to close roughly 20 pips higher near the 1.0715 level.
The session close brought some excitement as the Reserve Bank of New Zealand cut rates by a larger than expected -50 basis points to 7.50%. Bollard offered some dovish comments to accompany the cut, saying flat out that the New Zealand economy will contract in 3Q after having been in recession in the first half of the year. He also hinted at further rate cuts to come, noting that policy will become less restrictive. NZD/USD was slammed about -85 pips on the news towards the 0.6545 zone. The pair now sees weakness into the 0.6500 area next.
Upcoming Economic Data Releases (Asia Session):
- 9/10 22:45 NZ Food Prices (MoM) AUG 0.60% - -
- 9/10 23:50 JN Machine Orders YOY% JUL 9.70% -4.90%
- 9/11 0:00 NZ Business NZ PMI AUG 48.8 - -
- 9/11 1:00 AU Consumer Inflation Expectation SEP 4.90% - -
- 9/11 1:30 AU Employment Change AUG 10.9K 5.9K
- 9/11 1:30 AU Unemployment Rate AUG 4.30% 4.40%
