Forex Today: Sentiment sours again with safe havens in demand, NZD/USD crashes
Here is what you need to know on Wednesday, August 7th:
- Markets are stable after correcting higher on "turnaround Tuesday" but tensions are high. China has fixed USD/CNY just below 7.00, keeping the focus around its devaluation high. White House adviser Larry Kudlow said he still expects trade talks to resume in September.
- Safe-haven flows have picked up again, with the Japanese yen gaining ground and gold hitting the highest since 2013 at $1,490.
- Fed official James Bullard has said that the Federal Reserve should not respond to every move in the trade war and reduced expectations for further rate cuts. Bullard is known as a dove. His colleague Charles Evans will be speaking today.
- The New Zealand dollar has crashed by around 2% to below 0.6400 after the Reserve Bank of New Zealand shocked markets by slashing interest rates by 50 basis points to 1.00%. Governor Adrian Orr has said that uncertainty is rising around the US-Sino trade war is hurting business confidence and paralyzing activity. The move has been a huge surprise as it came after an excellent jobs report in the nation.
- AUD/USD has been dragged lower by the NZD sell-off and dropped below 0.67 – hitting the lowest in a decade. The Reserve Bank of Australia left interest rates unchanged on Tuesday but is now expected to act.
- Commodities are falling with Brent Oil entering a bear market, following the lead of iron ore.
- UK: Michael Gove, who is responsible for no-deal preparations, has blamed the EU of intransigence and reiterated that the UK is leaving on October 31st "deal or no deal." PM Boris Johnson's messages to his European counterparts have been that Theresa May's agreement must be scrapped.
- Cryptocurrencies have retreated after an attempt to move higher, with Bitcoin trading below $12,000.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
