Breaking News
0

Dollar Slips, NZD Hits 3-Month Highs

By Kathy LienForexJul 17, 2019 03:57PM ET
www.investing.com/analysis/dollar-slips-nzd-hits-3month-highs-200440984
Dollar Slips, NZD Hits 3-Month Highs
By Kathy Lien   |  Jul 17, 2019 03:57PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

NZDKathy Lien, Managing Director Of FX Strategy For BK Asset Management

Daily FX Market Roundup July 17, 2019

The U.S. dollar traded lower against all of the major currencies on Wednesday as Treasury yields resumed their slide. The New Zealand benefitted the most from the decline, rising to its strongest level in 3 months. Sterling, which had fallen to a year-to-date low versus the greenback during the European session recovered steadily into the NY close ending the day in positive territory. Housing starts and building permits dropped more than expected but the sell-off in the dollar really didn’t begin until the NY equity market open. Stocks started to fall and along followed the U.S. dollar. The Federal Reserve’s Beige Book didn’t hurt as the Fed districts reported a modest expansion with little change from the previous month. Most of their assessments were positive – they said manufacturing was flat but a few districts reported a modest pickup. Employment growth slowed slightly but their outlook is positive and they expect continued modest growth ahead. The problem is the widespread concern created by trade uncertainty. This outlook is consistent with the central bank’s broader views and did not have a meaningful impact on the greenback. Instead, the dollar took its cues from yields and stocks, which should remain the case for the rest of the week. Thursday’s Philadelphia Fed survey should be stronger given the uptick in manufacturing activity in the NY region.

There hasn’t been any meaningful progress in U.S.-China trade talks and President Trump isn’t pleased. On Tuesday he said there’s a long way to go on trade talks before an agreement can be reached and if China isn’t serious, he could unfreeze the final round of tariffs. While China wants the tariffs rolled back, it is not clear how far they will bend for this to happen. Their Commerce Minister was added to the negotiating team last week and many see an agreement more difficult with his hard-line stance. According to Commerce Minister Zhong Shang, “The US has started this economic and trade dispute with us in violation of the principles of the World Trade Organisation – a classic example of unilateralism and protectionism. We must make the best of the spirit of struggle, and stand firm in defending the interests of our country and the people, as well as the multilateral trading system.”

AUD and NZD took the news in stride with the latter rising to its strongest level in 3 months but if it becomes more apparent that trade talks turn sour, both currencies could suffer. In the meantime, NZD is outperforming its neighbor thanks to better-than-expected inflation data and higher dairy prices. Australian labor-market numbers were scheduled for release Wednesday night – there’s a good chance that job growth slowed because according to the PMIs, employment growth in the manufacturing and service sectors slowed in June. AUD/USD is at the cusp of a turn and weak labor-market numbers could take it down to .6950 easily.

The Canadian dollar continues to rise despite benign data. Although consumer prices declined less than expected in June, the -0.2% decrease was still the first drop in inflation this year. It drove the year-over-year rate down to 2% from 2.4% and the details of the report showed a decline in prices and internet services. Lower inflation is one of the main reasons why the central bank turned dovish this month but none of that seems to matter to the Canadian dollar. With oil oil prices falling for the fifth day in a row, it should only be a matter of time before USD/CAD bottoms as it is currently only being pressured lowered by the U.S. dollar.

Euro rebounded on the back of stronger inflation data but UK data was mixed. Inflationary pressures stagnated in June, leaving the year-over-year rate unchanged at 2%. As noted by our colleague Boris Schlossberg, “overall inflation readings in UK remain steady providing no impetus for BoE to move either way. For now, the focus in cable remains squarely on politics, but after all the harsh rhetoric from Torries regarding a hard Brexit, the markets appear to have settled down with traders now looking to see the next moves from London and Brussels once the leadership transition in both places is completed.”

Dollar Slips, NZD Hits 3-Month Highs
 

Related Articles

Dollar Slips, NZD Hits 3-Month Highs

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Partap Singh
Partap Singh Jul 18, 2019 12:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thank you Kathy
Krissy See
Krissy See Jul 17, 2019 11:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
really great
Rajesh kumar
Rajesh kumar Jul 17, 2019 11:28PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks good analysis
Owusu Ernest
Owusu Ernest Jul 17, 2019 10:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
fantastic analysis. Thanks Kathy
Chris Poulos
Chris Poulos Jul 17, 2019 8:34PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
not to nit pick but the pound did way more than fall to year to date lows. it hasnt been this low since april 2017 .... those are 25 month lows!
HUNG NGUYEN
HUNG NGUYEN Jul 17, 2019 7:08PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks a lot for analysis
sanele Gumede
sanele Gumede Jul 17, 2019 6:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good analyses
Gaba Mthembu
GabaMthembu Jul 17, 2019 5:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Easy to understand analysis, thanks
liakat ali
liakat ali Jul 17, 2019 4:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thank you very much for nice analysis.
pratik baral
pratik baral Jul 17, 2019 4:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Good to have you back
Nnenna Ewa
Nnenna Ewa Jul 17, 2019 4:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
glad to see you are Kathy. noticed your absence here for over a week and got bothered.trust you are doing well.thank you for always helping analyze the market for us.
Nnenna Ewa
Nnenna Ewa Jul 17, 2019 4:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
glad to see you here again...
Marita Karin
Marita Karin Jul 17, 2019 4:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yas, where have you been kath? short holiday, huh?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email