Dollar Continues To Weaken; Kiwi To a One-Month High

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Dollar Continues To Weaken; Kiwi To a One-Month High

OCTOBER 18, 2019

The U.S. continued to trade lower overnight and is facing the biggest weekly drop in a month and a half.

Overview

The Dollar index has declined for four consecutive days, mostly on positive developments abroad. But the domestic economic docket also did not do the greenback any favors this week.

There is no data on today’s docket that can save the greenback with only leading indicators due out at 10 a.m.  However, there are several Fed Speakers on today’s docket that could spark some volatility.

The risk sentiment remains fairly positive, despite poor growth data released in China.  The world’s second-largest economy only grew 6% in the three months through September.  The reading marks the slowest growth since the early 90s.  The data didn’t dent the overall risk appetite and allowed some of the growth currencies such as the Australian dollar to rise.

What to Watch Today…

  • No major events scheduled for today.

Complete Economic Calendar can be found here.

NZD

The New Zealand dollar continued its march higher against the U.S. dollar overnight, touching a one-month high.  The Kiwi has a tight correlation to dairy prices, which is always interesting to follow.  The Bank of New Zealand raised its 2019-2020 milk-price forecast, saying that global dairy prices have shown a hint of an increase.  This news was enough to send the Kiwi up over half a percent overnight.

The Kiwi has gained against the greenback for four consecutive weeks.

GBP

The sterling is a touch stronger this morning but still a full percent lower than its intra-day high of early yesterday.  This weekend will be pivotal for Brexit.   Prime Minister Boris Johnson faces a tough vote on his newly negotiated deal to leave the trade bloc.  Northern Ireland’s DUP has announced they will not vote in favor of the deal, meaning Johnson will need members of his rival parties to vote in favor of the deal. We should know the results by mid-morning east coast time tomorrow.  Tempus analysts will be channel surfing between BBC News and Premier League football. The result of the vote is far from certain but the progress made this week significantly reduces the chances that the U.K. will crash out without a Brexit deal.  Currency markets will be closed at the time of the vote so expect heavy volatility on the open Sunday afternoon east coast time.

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