Dollar’s strong rally paused in early US trading after PCE inflation data came in below expectations, easing concerns that Fed might maintain higher rates for an extended period. Markets are also digesting remarks from Fed officials following the hawkish rate cut earlier in the week. Most notably, Cleveland Fed President Beth Hammack, the sole dissenter […]

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Yen, which has been one of the weakest currencies this week, showed a modest recovery during today’s Asian session. The rebound came on the back of stronger-than-expected inflation data and renewed verbal intervention from Japan’s Finance Ministry. November’s inflation figures revealed a sharp reacceleration, driven by significant increases in energy prices and rice prices. Despite […]

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New Zealand’s trade data for November showed a significant improvement, with goods exports rising 9.1% yoy to NZD 6.5B, while goods imports increased by a more modest 3.9% yoy to NZD 6.9B. The resulting trade deficit of NZD -437m was much smaller than the expected NZD -1951m. Exports saw notable gains across key markets. Shipments […]

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Key insights from the week that was. As is tradition in Australia, the Federal Government delivered its mid-year economic and fiscal outlook in the lead up to Christmas. As anticipated, this update highlighted a troubling combination of fading revenue windfalls and persistent strength in spending across critical services, infrastructure, cost-of-living measures and state/local grants. While […]

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Both Sterling and Japanese yen are among the weakest-performing currencies today, following their respective central banks meetings. BoE left rates unchanged at 4.75%, but the surprise came from a dovish shift in the MPC, with three members voting for a cut. While BoE reiterated that a “gradual approach” to easing remains appropriate, rising concerns over […]

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The New Zealand dollar had a miserable Wednesday, plummeting 2.3%. NZD/USD has reversed directions Thursday and is trading at 0.5659 in the European session, up 0.66% on the day at the time of writing. The New Zealand dollar has been on a sharp descent, falling 10.8% since Oct. 1. US dollar soars after Fed rate […]

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Markets The Fed lowered policy rates yesterday from 4.5%-4.75% to 4.25-4.5%, a level chair Powell said is still “meaningfully restrictive”. The decision was expected but not unanimous. Cleveland Fed Hammack voted to keep rates steady which given the circumstances had a lot to say for. The economy is doing fine with GDP forecasts left unchanged […]

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Fed’s hawkish rate cut overnight sparked an outsized market reaction, with DOW plunging over -1100 points and NASDAQ losing -3.5%. Fed’s messages didn’t deviate from expectations leading to the meeting, indicating a slower easing path in 2025 with likely just two more rate cuts and a terminal rate near or above 3.0%. But markets responded […]

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New Zealand’s ANZ Business Confidence Index fell to 62.3 in December, down from 64.9. However, some subindices showed encouraging signs of recovery. The own activity outlook improved to 50.3 from 48.0, while profit expectations rose significantly to 31.1 from 26.5. Investment intentions also jumped to 21.5 from 18.0, signaling increased business willingness to allocate resources […]

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New Zealand’s economy contracted by -1.0% qoq in Q3, significantly worse than market expectations of -0.2%. The previous quarter’s GDP figure was also revised down sharply, from -0.2% to -1.1%, painting a grimmer picture of the country’s economic performance. The decline was broad-based, with activity falling in 11 out of 16 industries, including significant contractions […]

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The OCR looks set to end 2025 at 3.25% – lower than previously thought. We continue to see a 50bp cut in February but now think it will be followed up with 25bp cuts in April and May 2025. GDP printed sharply lower in Q2 and Q3 2024 – falling a cumulative 2.1%. The RBNZ […]

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Yen weakened across the board today in an otherwise consolidative market , as traders increasingly anticipate that BoJ will hold steady on monetary policy at its upcoming this week. BoJ policymakers appear to see no urgency in extending the tightening cycle this month, preferring instead to wait for January’s updated economic projections before deciding on […]

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The forex market began the week on a subdued note, with mild risk-off sentiment setting the tone. China’s latest economic data painted a bleak picture, with retail sales significantly underperforming expectations and fixed asset investment experiencing a deeper decline. While industrial production growth met forecasts, it failed to offset concerns about the broader economic slowdown. […]

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New Zealand’s BusinessNZ Performance of Services Index rose significantly from 46.2 to 49.5 in November, signaling a move closer to stabilization. However, the index remains under the no-change threshold of 50.0 and well below its long-term average of 53.1. Key subcomponents offered a mixed picture. Activity/sales improved from 44.4 to 48.6, and new orders/business rose […]

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The Euro rebounded broadly today, buoyed by reassurances from a number of ECB officials that the central bank remains committed to a gradual approach to policy easing. Yesterday’s 25bps rate cut appears to have had solid consensus backing, with no indications that a more aggressive 50bps cut was even seriously debated. Despite recent economic softness […]

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Sterling slumped broadly today after UK GDP unexpectedly contracted in October, missing forecasts of modest growth. This contraction underscores the challenges facing the UK economy, which has been grappling with persistent inflation and uncertainty following the Autumn Budget. The government’s recent pledge to transform the UK into the fastest-growing G7 economy now seems even more […]

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New Zealand’s BNZ Performance of Manufacturing Index dipped from 45.7 to 45.5 in November, marking its lowest reading since July 2024 and extending the contraction streak to 21 consecutive months. Despite some improvement in select components, the sector remains under significant strain, highlighting the challenges of achieving a meaningful turnaround. Production weakened further, dropping from […]

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Commodity currencies came under pressure towards the end of 2024 Bets of a Fed pause at the turn of the year turbo-charge the dollar Tariff fears and frustration about China’s policies also main drivers Monetary policy could prove decisive in the battle among them Aussie, kiwi, loonie surrender to stronger US dollar As 2024 approaches […]

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The forex markets are generally staying in consolidation mode today with US on thanksgiving holiday. , and even Yen’s rally is losing some momentum. Nevertheless, the Japanese currency might find some renewed life with the Tokyo CPI data in the upcoming Asian session. BoJ Governing Kazuo Ueda has recently kept the option for a rate […]

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The forex market has turned subdued as the US Thanksgiving holiday curbs activity, but overall trends have held steady. Yen continues to outperform, supported by the ongoing decline in US and European benchmark yields, maintaining its position as the strongest currency this week so far . Euro is the second strongest, showing signs of gaining […]

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