Monday 16th September 2019
|Text too small?|
The kiwi is weaker after the greenback got a lift from improving US retail data and as markets keep a close eye on Saudi Arabia after weekend attacks on major oil plants.
The kiwi was trading at 63.68 US cents at 7:55 am in Wellington versus 63.75 late Friday in New York and 64.04 US cents at 5pm in Wellington.
The US dollar rose after retail sales rose 0.4 percent on the month in August, versus expectations for a 0.2 percent increase. Also, the preliminary read of the University of Michigan Sentiment index showed consumer sentiment rebounding to 92.0, above expectations of a 90.8 read and up from 89.8 in August.
The US Federal Reserve is expected to cut its policy rate by another 25 basis points to between 1.75 percent and 2.00 percent at this week’s meeting but “rising core inflation, still-solid incoming activity data and the temporary thaw in the US-China trade war together support our view that the Fed will then stand pat at the October meeting, before a further gradual slowdown in economic growth prompts one final rate cut in December,” according to Capital Economics.
Today, however, markets are likely to be jittery after attacks on Saudi oil plants on Saturday knocked out more than half of the country’s output or more than 5 percent of global supply. Any pullback in global risk appetite will weigh further on the kiwi.
“The plant is a major source of supply and a prolonged outage as a result of the attack has the potential to negatively impact global energy markets,” said ANZ FX/Rates strategist Sandeep Parekh.
However, Saudi Arabia’s oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, an industry source briefed on the developments told Reuters on Sunday.
US officials have also voiced a willingness to dip into reserves to offset supply impacts.
Meanwhile, the kiwi took a further tumble against the British pound as markets remained hopeful a no-deal Brexit might be avoided. It was trading at 51.00 British pence, unchanged from late Friday in New York but down from 51.85 at 5pm in Wellington.
However, news of PM Boris Johnson being prepared to defy the new laws could see this optimism unwind, said Parekh.
The Mail on Sunday newspaper quoted Johnson as saying “we will come out on Oct. 31,” after likening himself to the Incredible Hulk.
The kiwi was at 57.52 euro cents from 57.59 late Friday In New York, at 68.55 yen from 68.94 and at 4.5097 Chinese yuan from 4.5134.
No comments yet
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred
U.S. Added 4.8 Million Jobs in June as Reopened Businesses Rehired
Auditors have a duty to be alert to fraud
Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19
Auditors keep falling into the same trap
The great interruption continues
Update on Clutha Upper Waitaki Lines Project
Napier Port Welcomes Inland Port Funding
Auckland Airport provides details of Other Significant Items expected to impact 2020 financial results and an update on further organisational change