KIWI
The Kiwi Dollar moved from $0.64020 to $0.64017 upon release of the figures that preceded the RBNZ policy decision and press conference.
AUD
The RBNZ held rates unchanged at 1% this morning, which was in line with expectations. Salient points from the Rate Statement included:
Economic growth is expected to accelerate in the 2nd half of 2020, supported by both monetary and fiscal stimulus and favorable trade terms.The outlook for government spending is positive as is the outlook for household spending growth.Soft momentum in economic growth continued into 2020, with softer global growth in 2019 acting as a headwind to the domestic economy.The global economy has shown signs of stabilizing, with trade tensions easing, while the corona-virus outbreak remains a downside risk.
The Aussie Dollar moved from $0.67173 to $0.67202 upon release of the stats. At the time of writing, the Aussie Dollar was up by 0.19% to $0.6727.
YEN
At the time of writing, the Japanese Yen was down by 0.05% to ¥109.84 against the U.S Dollar.
EURO
It’s a relatively quiet day ahead on the economic calendar. Industrial production figures are due out of the Euro-zone later today.
Following some particularly disappointing production numbers out of France, Germany, and Italy, today’s figure will need to be particularly dire to move the dial. Expectations are for production to fall by 1.5% in December, so expect the EUR to soften on any weaker numbers.
Outside of the stats, geopolitical risk is on the rise once more. Tensions return in Italy, with the Irish election result also raising some uncertainty. Things are not much better in Germany, as Merkel’s CDU Party sees Merkel’s chosen successor resign. Expect chatter from Italy and Germany to garner plenty of attention. The last thing the EU needs is discord as it prepares to negotiate with Britain on trade. At the time of writing, the EUR was up by 0.02% to $1.0919.
POUND
Economic data from the UK on Tuesday appeared to vindicate MPC members who decided to vote in favor of a hold on interest rates. The UK managed to avoid an economic contraction, in spite of soft manufacturing and industrial production at the end of the year.
The Pound can hold onto $1.29 levels and eye a return to $1.30 levels remains to be seen, however.Much will depend on how the government progresses with key trading partners on trade talks.
At the time of writing, the Pound was up by 0.07% to $1.2961.
US DOLLAR
It’s a quiet day ahead on the data front, with no material stats due out later today to provide the Dollar with direction.
The lack of stats will leave FED Chair Powell and his 2nd day of testimony in focus.
At the time of writing, the Dollar Spot Index was up by 0.04% to 98.765.
CAD
Crude oil prices will influence on the day, with OPEC’s monthly report and the weekly IEA numbers due out later today. The Loonie was up by 0.01% at C$1.3285 against the U.S Dollar, at the time of writing.
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