Market wrap: RBNZ on hold, lowers OCR forecasts, China announced new tariffs - Westpac

In a market wrap, analysts at Westpac have explained that AUD/USD tumbled as China announced new tariffs on US vehicle and energy imports but recovered to 0.7430. 

Key Quotes:

"CAD seesawed on Saudi and NAFTA headlines while NZD slipped on the dovish RBNZ statement. Today's calendar is low key - China July CPI, a likely rate hike in the Philippines and a Singapore holiday."

"The recent rally in US equities stalled and oil prices fell amid China’s announcement in the London morning that it would impose a 25% tariff on $16bn of US vehicle and energy imports from 23 August."

"EUR/USD was little changed, trading either side of 1.1600. Underperformer GBP fell from 1.2960 to 1.2854 – the lowest since August 2017 – as markets repriced the chance of a hard Brexit."

"AUD/USD fell from 0.7430 in London to as low as 0.7383 on the China tariff headlines but recovered in NY trade. USD/JPY consolidated yesterday afternoon’s fall to 110.85."

"The RBNZ kept its cash rate at 1.75% as entirely expected and released its quarterly Monetary Policy Statement. In the forecasts, the RBNZ shifted out the projected timing of a rate rise from Q1 2020 to Q4 2020. The opening commentary was dovish: “We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down.”"

"NZD/USD slipped from 0.6750 to lows under 0.6710 on the headlines and AUD/NZD bounced from 1.1015 to 1.1070, probing January’s 2018 highs."

"USD/CAD traded a wide 1.3007-1.3120 range, absorbing reports that Saudi Arabia was selling Canadian assets as further punishment for Canada’s criticism of the detention of Saudi women’s rights activists and claims that a deal on NAFTA could be reached this month."