Waiting until November

The New Zealand dollar was the best performing Asian currency during this morning’s session after RBNZ Governor Orr said that the central bank will do whatever is necessary to support the local economy, but can afford to wait and see what is happening. This implies that the Bank will be monitoring the impact of the bigger-than-expected cut in the official cash rate on August 7 and, if things appear to be going well, may hold off on further cuts in the near term.

He added that the RBNZ will likely wait until November and possibly cut if necessary. Currently, interest rate markets are assigning a 70% probability of a 25 bps cut at that meeting, with just an 11% chance for September.

In response to the comments, the Kiwi advanced versus the US dollar and the Japanese yen, with NZD/USD potentially facing the first up-day in three days. NZD/USD was up 0.45% at 0.6393 while NZD/JPY climbed 0.51% to 68.111 by lunch.

NZD/USD Daily Chart

Source: OANDA fxTrade


Progress on the trade front

Unfortunately, it’s not between the US and China, but between the US and Japan. Japan’s economy Minister Motegi said that ministerial level talks between US and Japanese negotiators will resume tomorrow, as talks have been extended by one day. These talks are mostly focused around agriculture and autos. He added that they are getting close to a conclusion, and it is possible that US President Trump and Japan PM Abe may discuss trade talks on the sidelines of the G7 meeting this weekend.

USD/JPY traded slightly higher during this morning’s session, rising to 106.62 amid a broader risk-on mood which saw all indices in the black. Wall Street indices rose between 0.35% and 0.52%, with the NAS100 index outperforming, while China shares rose more than 1% to hit the highest level this month. Hong Kong shares recouped half of yesterday’s losses after a quiet night on the streets.

China A50 Daily Chart

Source: OANDA fxTrade


The Jackson Hole spotlight

There are a number of Fed speakers on the supporting bill at Jackson Hole, including Bullard, Kaplan, Mester and Harker, but it will be Chairman Powell who will steal the limelight at 1400GMT today. No matter what the expectations are for the content of his speech, we are likely to see some serious volatility during and afterwards. Buckle up for a bumpy ride.

Economic data will take a back seat today, but for the record, US new home sales are expected to decline 0.2% m/m in July, a turnaround from June’s +7.0%.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD eases toward 1.1050 amid fears of US-EU trade war, mid-East flare up

EUR/USD has kicked off the week with a slide toward 1.1050, close to its closing levels on Friday. Fears of US tariffs against the EU and the fallout from the attack on Saudi oil installations weighs.


GBP/USD drops to around 1.2450 ahead of Johnson-Juncker meeting

GBP/USD is trading closer to 1.2450, lower. UK PM Johnson will meet EC Commission President Juncker to discuss Brexit amid reports of progress. Tensions in the Middle-East and uncertainty ahead of the Fed impact markets.


USD/JPY looking to close the bearish opening gap amid risk-off

USD/JPY gapped down to 107.44 on Monday’s open as risk appetite is diminished following the attack on Saudi Arabian oil facilities. The spot now trades near 107.80, aiming to close the bearish opening gap ahead of a big week. 


Forex Today: Oil prices skyrocket after attack on Saudi installation, Chinese economy slows, Brexit talks continue

Here is what you need to know on Monday, September 16: A drone attack on a Saudi oil facility knocked down around 50% of the Kingdom's output and 5% of global production.

Read more

Gold prices shot higher by over 1% in risk-off start to the week

Gold prices have shot higher in the open this week due to the increased tensions in the Middle East following the attack on Saudi Arabia’s oil and gas facilities in Abqaiq which has suspended half of the kingdom’s processing.

Gold News

Forex Majors