FX News

FX Update: NZD Recovers Off Lows

Market Overview

Key Points:

• US Holiday Monday made for a slow start to the week
• Chinese city Shenzhen goes back into covid lockdown for 7 days through to the weekend
• July Japanese household spending -1.4%
• The ECB meets Friday and should hike rates 75 points, further hikes are predicted of 50 points in October and 25 in December
• The EU pushes for a cap on gas prices from Russia, the discussion is particularly relevant as Russia closes Nord Stream gas flows
• The US Dollar (USD) been the strongest currency over the past 10 days while the British Pound (GBP) and the Japanese Yen (JPY) are the weakest on the main board
• US Jobs employment data points to a turning economy
• Newly appointed UK Prime Minister Liz Truss says she will address the cost-of-living crisis by cutting taxes and growing the economy

Major Announcements last week:

  • German prelim CPI m/m 0.3% vs 0.3% expected
  • US Consumer Confidence 103.2 forecast 97.6
  • Eurozone CPI y/y 9.1% up from 8.9%
  • Canadian GDP m/m 0.1%
  • Caixin (Chinese) Manufacturing PMI 49.5 vs 50.1 much sofer than predicted
  • US Non Farm Payroll 232k vs 250k expected
  • US Unemployment Rate 3.7% up on 3.5% expected and higher than previous months 3.5%
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