Kiwi spared as RBNZ holds rates

Andrew Robinson MarketPulse

NZD/USD rises for a third day

The New Zealand dollar was spared a drubbing that would have come if the Reserve Bank of New Zealand had surprised the markets with another rate cut this morning. The NZD/USD pair looks set for a third daily advance, the last time this happened was the beginning of the month, and has rallied to the highest level in a week. Most of yesterday’s gains were on the back of a weaker US dollar after impeachment proceedings were announced against US President Donald Trump.

NZD/USD Daily Chart

Source: OANDA fxTrade

More uncertainty around Brexit

The UK Supreme Court deemed Boris Johnson’s suspension of Parliament for five weeks unlawful. The decision means the UK Members of Parliament have to return to work, five weeks ahead of the October 31 Brexit deadline. It is likely that there will not be enough time to pass any kind of anti-no deal legislation before the deadline, but the ruling just increases the uncertainty about what is going to happen come the end of next month. Boris Johnson remained defiant, saying he would respect the ruling, but it was not right. Ha said Brexit would be delivered by October 31.

The reaction in the pound was mixed, pressing lower initially in a kneejerk reaction but recouping those losses with GBP/USD finishing higher on the day, though due to a weaker US dollar rather than GBP strength. The FX pair is hovering near the 100-day moving average at 1.2471.

GBP/USD Daily Chart

Source: OANDA fxTrade

A slow data day

Like most of this week, today’s data calendar is lacking in tier-1 data with US new home sales for August the major data point. They’re expected to rise 3.9% from a month earlier after posting a 12.8% decline in July. For the European session, a speech from ECB’s Coeure is the only attraction.

Author

Andrew Robinson

MarketPulse

A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentar

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