Forex Today: Dovish Fed Minutes Hit Dollar

Recent FOMC meeting minutes released yesterday show members supporting a tapering of the Fed’s recent rate hikes, pushing up stock markets and the greenback to sell off.

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  1. Federal Reserve meeting minutes showed support amongst most of the committee members for beginning to taper the current policy of rate hikes soon. However, most members are unclear about what the peak rate to be reached during 2023 will need to be, with analysts currently forecasting a consensus 5%. The minutes did reveal a consensus that the rate was approaching a “sufficiently restrictive” level. The release of the minutes boosted stock markets and triggered a small selloff in the US Dollar.
  2. In the Forex market, the US Dollar has clearly been the weakest major currency, with the British Pound and the New Zealand Dollar looking particularly strong. The GBP/USD currency pair and the NZD/USD currency pair have reached new 3-month high prices.
  3. Flash Services & Manufacturing PMI data released yesterday in Germany, France, and the UK came in mostly a little higher than had been expected.
  4. It is a public holiday today in the USA (Thanksgiving) and local markets will be closed.
  5. Daily new global coronavirus cases remained steady last week, maintaining a downwards trend which began last July.
  6. It is estimated that 68.4% of the world’s population has received at least one dose of a coronavirus vaccination.
  7. Total confirmed new coronavirus cases worldwide stand at over 644.5 million with an average case fatality rate of 1.03%.  
  8. The rate of new coronavirus infections appears to now be significantly increasing only in China, Japan, the Solomon Islands, and Venezuela.  

New Zealand Makes Record Hike in Interest Rates

The New Zealand Reserve Bank (RBNZ) has delivered an unprecedented 0.75% interest rate rise to a total of 4.25% as it ramps up its attempt to tame high inflation, which is currently running at 7.2% for the third quarter of 2022.

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Known as the official cash rate in New Zealand, interest rates there are now at the highest they have been since January 2009 just after the 2008 global financial crash.

Overall, the RBNZ has just made its eighth consecutive interest rate rise since October 2021. In August 2021, the official cash rate was only 0.25%.

The RBNZ has earned a reputation for being comparatively hawkish in attacking inflation, a sentiment that will be further enhanced by its latest move.

This rate hike will come as a blow for New Zealand’s businesses, consumers, and mortgage payers.

There was further gloomy news as the Bank also forecast New Zealand will enter a recession around September 2023, which is to stretch into 2024.

Although the downturn is expected to be shallow, with GDP expected to fall by 0.5% in the second quarter of 2023, and then by 0.3% the following quarter.

Many analysts predicted the rate rise, but the forecast of a recession will come as a surprise to some.

Inflation Headwinds Reason for Rate Rise 

The Bank’s Monetary Policy Committee pushed the button on the record increase in interest rates due to significant inflationary pressures.

Domestically, demand has remained resilient and household spending has remained high, notwithstanding an increasingly depressed housing market, rising rates and increased uncertainty over the global economic picture.

Several factors have contributed to the domestic demand, including high employment rates, spiraling wages, and payments that have been distributed to help with the cost of living.

Additionally, government support to cope with the Covid-19 pandemic has also resulted in households having increased savings, further boosting spending power.

Tourism has also been given a lift as there has been a stronger rise in visitors to New Zealand than anticipated since its borders reopened due to the pandemic, as it closed them soon after the pandemic began.

Worker Shortages and Global Trends Add to Inflation Problem 

As the unemployment rate remains extremely low at 3.3%, there are worker shortages in certain industries which are holding back output.

Yet these are shortages that are contributing to workers receiving a good deal in salary packages, adding to the issue of inflation.

The RBNZ expects that the unemployment rate will remain low, and that employers will hang on to their existing workforces.

On a global scale, the increase in energy and commodity prices due to the conflict in Ukraine has unsurprisingly contributed to inflation.

Goods that New Zealand imports have also increased in price, as the inflation menace has crossed borders across the world.

The weaker outlook for global demand, according to the RBNZ, will also result in lower growth.

New Zealand Falls, Stocks Increase

The New Zealand Dollar reacted slightly bullishly to the RBNZ rate hike, rising by a fraction against both the US Dollar and the Japanese Yen.

The benchmark domestic stock index, New Zealand 50 Index, unexpectedly rose after the rate rise announcement, albeit by the small margin of 0.08% to 11323.80.

Forex Today: Dovish Fed Minutes Hit Dollar – 24 November 2022

Recent FOMC meeting minutes released yesterday show members supporting a tapering of the Fed’s recent rate hikes, pushing up stock markets and the greenback to sell off.

Advertisement

   

  1. Federal Reserve meeting minutes showed support amongst most of the committee members for beginning to taper the current policy of rate hikes soon. However, most members are unclear about what the peak rate to be reached during 2023 will need to be, with analysts currently forecasting a consensus 5%. The minutes did reveal a consensus that the rate was approaching a “sufficiently restrictive” level. The release of the minutes boosted stock markets and triggered a small selloff in the US Dollar.
  2. In the Forex market, the US Dollar has clearly been the weakest major currency, with the British Pound and the New Zealand Dollar looking particularly strong. The GBP/USD currency pair and the NZD/USD currency pair have reached new 3-month high prices.
  3. Flash Services & Manufacturing PMI data released yesterday in Germany, France, and the UK came in mostly a little higher than had been expected.
  4. It is a public holiday today in the USA (Thanksgiving) and local markets will be closed.
  5. Daily new global coronavirus cases remained steady last week, maintaining a downwards trend which began last July.
  6. It is estimated that 68.4% of the world’s population has received at least one dose of a coronavirus vaccination.
  7. Total confirmed new coronavirus cases worldwide stand at over 644.5 million with an average case fatality rate of 1.03%.  
  8. The rate of new coronavirus infections appears to now be significantly increasing only in China, Japan, the Solomon Islands, and Venezuela.  

Forex Today: Hawkish RBNZ in Record Rate Hike

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

New Zealand Makes Record Hike in Interest Rates – 24 November 2022

The New Zealand Reserve Bank (RBNZ) has delivered an unprecedented 0.75% interest rate rise to a total of 4.25% as it ramps up its attempt to tame high inflation, which is currently running at 7.2% for the third quarter of 2022.

Advertisement

Known as the official cash rate in New Zealand, interest rates there are now at the highest they have been since January 2009 just after the 2008 global financial crash.

Overall, the RBNZ has just made its eighth consecutive interest rate rise since October 2021. In August 2021, the official cash rate was only 0.25%.

The RBNZ has earned a reputation for being comparatively hawkish in attacking inflation, a sentiment that will be further enhanced by its latest move.

This rate hike will come as a blow for New Zealand’s businesses, consumers, and mortgage payers.

There was further gloomy news as the Bank also forecast New Zealand will enter a recession around September 2023, which is to stretch into 2024.

Although the downturn is expected to be shallow, with GDP expected to fall by 0.5% in the second quarter of 2023, and then by 0.3% the following quarter.

Many analysts predicted the rate rise, but the forecast of a recession will come as a surprise to some.

Inflation Headwinds Reason for Rate Rise 

The Bank’s Monetary Policy Committee pushed the button on the record increase in interest rates due to significant inflationary pressures.

Domestically, demand has remained resilient and household spending has remained high, notwithstanding an increasingly depressed housing market, rising rates and increased uncertainty over the global economic picture.

Several factors have contributed to the domestic demand, including high employment rates, spiraling wages, and payments that have been distributed to help with the cost of living.

Additionally, government support to cope with the Covid-19 pandemic has also resulted in households having increased savings, further boosting spending power.

Tourism has also been given a lift as there has been a stronger rise in visitors to New Zealand than anticipated since its borders reopened due to the pandemic, as it closed them soon after the pandemic began.

Worker Shortages and Global Trends Add to Inflation Problem 

As the unemployment rate remains extremely low at 3.3%, there are worker shortages in certain industries which are holding back output.

Yet these are shortages that are contributing to workers receiving a good deal in salary packages, adding to the issue of inflation.

The RBNZ expects that the unemployment rate will remain low, and that employers will hang on to their existing workforces.

On a global scale, the increase in energy and commodity prices due to the conflict in Ukraine has unsurprisingly contributed to inflation.

Goods that New Zealand imports have also increased in price, as the inflation menace has crossed borders across the world.

The weaker outlook for global demand, according to the RBNZ, will also result in lower growth.

New Zealand Falls, Stocks Increase

The New Zealand Dollar reacted slightly bullishly to the RBNZ rate hike, rising by a fraction against both the US Dollar and the Japanese Yen.

The benchmark domestic stock index, New Zealand 50 Index, unexpectedly rose after the rate rise announcement, albeit by the small margin of 0.08% to 11323.80.

Forex Today: Hawkish RBNZ in Record Rate Hike – 23 November 2022

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Forex Today: Bitcoin Reaches New 2-Year Low Price

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Forex Today: Bitcoin Reaches New 2-Year Low Price – 22 November 2022

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

Forex Today: US Dollar Starts Week With Gains

The week begins with the US Dollar strengthening against all other G10 currencies as Bitcoin, Crude Oil, and European currencies are selling off.

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  1. Global stock markets are trading mostly lower as the US Dollar starts the week by gaining against all the other G10 currencies. US Treasury yields are also rising. There is a flow into safe havens on deteriorating sentiment, but the sentiment is not very strong. Reported coronavirus deaths in China are causing fears of further enforced economic slowdowns there.
  2. WTI Crude Oil is trading lower, heading towards its recent long-term lows which may be tested over the coming days. The decline is partly due to the previously mentioned China worries.
  3. In the Forex market, while the US Dollar is clearly the strongest major currency as it is gaining almost everywhere, the Euro and the British Pound are currently the weakest major currencies.
  4. Daily new global coronavirus cases remained steady last week, maintaining a downwards trend which began last July.
  5. It is estimated that 68.4% of the world’s population has received at least one dose of a coronavirus vaccination.  
  6. Total confirmed new coronavirus cases worldwide stand at over 643.1 million with an average case fatality rate of 1.05%.  
  7. The rate of new coronavirus infections appears to now be significantly increasing only in China, Japan, the Solomon Islands, and Tuvalu.  

Forex Today: US Dollar Starts Week With Gains – 21 November 2022

The week begins with the US Dollar strengthening against all other G10 currencies as Bitcoin, Crude Oil, and European currencies are selling off.

Advertisement

   

  1. Global stock markets are trading mostly lower as the US Dollar starts the week by gaining against all the other G10 currencies. US Treasury yields are also rising. There is a flow into safe havens on deteriorating sentiment, but the sentiment is not very strong. Reported coronavirus deaths in China are causing fears of further enforced economic slowdowns there.
  2. WTI Crude Oil is trading lower, heading towards its recent long-term lows which may be tested over the coming days. The decline is partly due to the previously mentioned China worries.
  3. In the Forex market, while the US Dollar is clearly the strongest major currency as it is gaining almost everywhere, the Euro and the British Pound are currently the weakest major currencies.
  4. Daily new global coronavirus cases remained steady last week, maintaining a downwards trend which began last July.
  5. It is estimated that 68.4% of the world’s population has received at least one dose of a coronavirus vaccination.  
  6. Total confirmed new coronavirus cases worldwide stand at over 643.1 million with an average case fatality rate of 1.05%.  
  7. The rate of new coronavirus infections appears to now be significantly increasing only in China, Japan, the Solomon Islands, and Tuvalu.