Aussie is Under pressure of UsD
Updated
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The Australian and New Zealand Dollars finished lower last week, weighed down by lingering domestic issues. A plunge in U.S. Treasury yields on Friday drove the U.S. Dollar lower, lending a little support to the beat up Aussie and Kiwi, while helping to reduce some of their earlier losses in the week. Looking ahead, escalating tensions between the United States and China could keep a lid on the Australian and New Zealand Dollars.
Last week, the AUD/USD settled at .6756, down 0.0027 or -0.40%, and the NZD/USD closed at .6396, down 0.0029 or -0.45%.
The Aussie received a boost early in the week when the Reserve Bank of Australia (RBA) Monetary Policy Minutes showed policymakers were willing to “wait and see” how the economy does after a pair of rate cuts in June and July. This helped reduce the chances of a September rate cut.
The New Zealand Dollar drifted lower all week until Friday. The selling pressure was enough to take out the August 7 bottom that was reached after the Reserve Bank of New Zealand (RBNZ) shocked the markets with an unexpected 50-basis point rate cut.
The kiwi jumped from a three-and-a-half-year low after RBNZ Governor Adrian Orr said he was “pleased” with where interest rates were, dampening expectations of another rate cut in September.
Looking at the bigger picture, President Trump triggered a steep break in the U.S. Dollar when he tweeted, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
The move by the greenback indicates there are increasing concerns that Trump’s latest comments will push the U.S. economy into a recession.
Although the biggest reaction in the markets was to Trump’s tweet, remarks from Federal Reserve Chairman Jerome Powell did put some pressure on the dollar due to their dovish nature.
Powell did not announce a major stimulus measure to ease concerns over a slowdown in global economic growth, but did prepare investors for further interest rate cuts. Powell acknowledged the U.S. economy was in a “favorable place” and the Fed would “act as appropriate” to keep the current economic expansion on track.
The Australian and New Zealand Dollars finished lower last week, weighed down by lingering domestic issues. A plunge in U.S. Treasury yields on Friday drove the U.S. Dollar lower, lending a little support to the beat up Aussie and Kiwi, while helping to reduce some of their earlier losses in the week. Looking ahead, escalating tensions between the United States and China could keep a lid on the Australian and New Zealand Dollars.
Last week, the AUD/USD settled at .6756, down 0.0027 or -0.40%, and the NZD/USD closed at .6396, down 0.0029 or -0.45%.
The Aussie received a boost early in the week when the Reserve Bank of Australia (RBA) Monetary Policy Minutes showed policymakers were willing to “wait and see” how the economy does after a pair of rate cuts in June and July. This helped reduce the chances of a September rate cut.
The New Zealand Dollar drifted lower all week until Friday. The selling pressure was enough to take out the August 7 bottom that was reached after the Reserve Bank of New Zealand (RBNZ) shocked the markets with an unexpected 50-basis point rate cut.
The kiwi jumped from a three-and-a-half-year low after RBNZ Governor Adrian Orr said he was “pleased” with where interest rates were, dampening expectations of another rate cut in September.
Looking at the bigger picture, President Trump triggered a steep break in the U.S. Dollar when he tweeted, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
The move by the greenback indicates there are increasing concerns that Trump’s latest comments will push the U.S. economy into a recession.
Although the biggest reaction in the markets was to Trump’s tweet, remarks from Federal Reserve Chairman Jerome Powell did put some pressure on the dollar due to their dovish nature.
Powell did not announce a major stimulus measure to ease concerns over a slowdown in global economic growth, but did prepare investors for further interest rate cuts. Powell acknowledged the U.S. economy was in a “favorable place” and the Fed would “act as appropriate” to keep the current economic expansion on track.
Trade closed: target reached
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