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Market uncertainty prevails with impeachment talk

Published September 27, 2019

Author: Rhys Miles

At face value there was very little activity overnight on the currency and equities markets. The recent Trump impeachment calls, whilst looking increasingly unlikely, still managed to nullify the muted risk-on appetite that prevailed upon Trump’s recent declaration that a trade deal with China could be done soon.

A released summary of the call between Trump and his Ukrainian counterpart was not the smoking gun the Democrats were hoping for though it does invite a lot more questions and justification for greater scrutiny. US pending home sales rose 1.60% with initial jobless claims slightly higher at 213k. Support in Europe is gathering momentum for fiscal stimulus but no impact initially on the EUO dollar. The RBNZ yesterday left rates unchanged stating that low corporate and government debt, low interest rates and economic opportunity leaves NZ well placed to manage current challenges.

The USD maintained its recent rally leaving the AUD languishing in the lower end of the same range of the last two months. On the cross rates, very little change against the EUR, GBP and NZD. Of greater significance to us locally is the RBA meeting next Tuesday. As recently as a month ago where an October cut was no chance it is now into a 76% probability. This of course, is keeping the pressure on the AUD which is still proving to be quite resilient.