FX News

• Worldwide coronavirus cases surpass 441.394 million with over 5.997 million official deaths.
• New Zealand has 23,183 active community cases of coronavirus with 503 people in hospital, 7 in intensive care.
• Equity indices give back gains from yesterday
• Standard & Poor’s cut Russia’s rating to CCC (Junk) with further rating cuts predicted
• Fed’s Powell says Ukraine invasion creates risks of higher inflation
• The Bank of Canada hiked their Cash Rate from 0.25% to 0.50% starting a planned aggressive tightening path
• US Crude prices settle around 108 a barrel
• Biden continues to impose heavy economic sanctions on Putin and the people around him targeting Oligarchs and families

Last week’s drop to 0.6630 in the US Dollar (USD), New Zealand Dollar (NZD) pair was brief with risk conditions improving, bouncing risk assets higher to 0.6750 into the close as Ukraine situation improved. However, the cross gapped 70 points lower to 0.6680 before recovering back to 0.6750 in early Tuesday trading. Volatility caused by mass uncertainty doesn’t mean the kiwi is on the comeback trail yet with central banks possibly rethinking their recent hawkish views and looser policy in response to ‘what could be”. The poor read in New Zealand Business Confidence in February proves there is widespread anxiety from the impact of omicron. Confidence fell to a net 51.8% of pessimistic from a net 23% pessimistic difference from the previous survey. Business activity has eased which has done nothing to bring about relaxing inflation which remains extremely high. Fed chair Powell testifies tomorrow with further confirmation likely of rate hikes on the horizon, if he backtracks the NZD should rally. Non-Farm Payroll releases Friday along with the US Unemployment Rate.

Tuesday 01/03
3:45am, USD, Chicago PMI
Forecast: 62.1
Previous: 65.2
4:30pm, AUD, Cash Rate
Forecast: 0.10%
Previous: 0.10%
4:30pm, AUD, RBA Rate Statement

Wednesday 02/03
2:30am, CAD, GDP m/m
Forecast: 0.00%
Previous: 0.60%
4am, USD, ISM Manufacturing PMI
Forecast: 58
Previous: 57.6
1:30pm, AUD, GDP q/q
Forecast: 3.00%
Previous: -1.90%
11pm, EUR, CPI Flash Estimate y/y
Forecast: 5.40%
Previous: 5.10%
11pm, EUR, Core CPI Flash Estimate y/y
Forecast: 2.50%
Previous: 2.30%
All Day, All, OPEC-JMMC Meetings Read more

The New Zealand Dollar (NZD) progressed to 0.6800 overnight against the US Dollar (USD) dropping back to 0.6770 this morning where it settled. Outperforming its rivals after an extra hawkish RBNZ sparking heavy buyer interest in the kiwi after raising the rates for a third time since October. The RBNZ raised rates 25 points to 1.0% in line with expectations with new forecasted projections of continued hikes to 2.2% by the end of this year reaching 3.3% in the fourth Q of 2023, this is in comparison to its November forecast of 2.6%. Read more

Key Points:

• Worldwide coronavirus cases surpass 429.741 million with over 5.935 million official
  deaths.
• New Zealand has 3297 active cases of coronavirus  with 179 people in hospital, just
  1 in intensive care.
• Things are heating up in the crisis between Ukraine and Russia with the Ukraine
  capital Kyiv declaring a state of emergency as the threat of an attack from Russia
  mounts.
• Fed’s Daily says they need more urgency with rate hikes, she is in the camp for a
  March rise to 0.25% and opinion the Fed are way too accommodating.
• Gold and precious metals are on the rise with the price of Gold up at 1910.00 per
  ounce this morning, this equates to over 112.00 in just February.

Monday 21/02
9:15pm, EUR, French Flash Services PMI
Forecast: 54
Previous: 53.1
9:30pm, EUR, German Flash Manufacturing PMI
Forecast: 59.6
Previous: 59.8
9:30pm, EUR, German Flash Services PMI
Forecast: 53.2
Previous: 52.2
10:30pm, GBP, Flash Manufacturing PMI
Forecast: 57.2
Previous: 57.3
10:30pm, GBP, Flash Services PMI
Forecast: 55.6
Previous: 54.1 Read more

Key Points:

• Worldwide coronavirus cases surpass 419.569 million with over 5.876 million official deaths.

• New Zealand has 1573 active cases of coronavirus with 62 people in hospital, none are in intensive care. The NZ border will reopen in stages from the 27th of this month in a 5 step plan of self-isolation for travellers to reduce the MIQ facilities.  
• Canadian CPI y/y up 2.3% compared to 2.1% in December
• France on the wires saying Iran nuclear deal is just days away
• Japanese Machinery orders jumped 3.6% vs -2.0% predicted for December
• Crude Oil is being supported by fears over a Russian invasion of Ukraine with predictions the commodity could push price over $100/barrel in the coming days