The New Zealand Dollar faced selling pressure at the start of the trading week as markets priced in the most dovish RBNZ policy outlook since 2009.
Talking Points:
NZ Dollar Slumps as Markets Bet on Most Dovish RBNZ Outlook Since 2009
Aussie Dollar Fails to Hold Gains After Comments from RBA DepGov Lowe
US Dollar Corrects Higher After Dropping the Most in a Month Last Week
The New Zealand Dollar underperformed in overnight trade amid deteriorating RBNZ policy expectations. Priced-in bets reveal investors are leaning toward two 25 basis point rate cuts over the coming 12 months, making for the most dovish outlook since 2009.
The Australian Dollar saw a bit of a boost following remarks from RBA Deputy Governor Lowe, who hinted the central bank probably won’t cut the cash rate further in the near term.Gains proved short-lived however considering the message echoed the tone of the RBA’s latest policy statement, which have had ample time to be priced already.
The US Dollar launched a broad-based recovery, scoring gains against nearly all of the majors in a move that appeared corrective after the benchmark unit lost 1.04 percent last week, the most in a month. From here, the greenback will look to minutes from April’s FOMC meeting and April’s US CPI data (both due later this week) for direction cues.
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