New Zealand Dollar Dominates AsiaPacific Market Action
- The New Zealand Dollar retreated following twin verbal bludgeonings from central bankers
- Elsewhere the US/North Korea imbroglio kept risk appetite low
- Oil prices slipped back too
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Thursday’s main market-focused Asia/Pacific action came from New Zealand.
The Reserve Bank left its key interest rate alone at record, 1.75% lows. That was expected. But Governor Graeme Wheeler went on the currency offensive soon after. He said explicitly that he felt the New Zealand Dollar was too high and reminded investors that intervention in the markets is always an option. This comment hit the kiwi, but not especially hard. However, the same sentiment was rammed home later in the Asian session by RBNZ Assistant Governor John McDermott. He said that the NZ Dollar “needs” to adjust down and that this change of language was intended as a nudge to markets.
Elsewhere the continuing imbroglio between North Korea and the United States continued all-too-predictably to overshadow market action. There was little obvious advancement in this story, beyond North Korea labelling US threats “a load of nonsense.” Still, Asian equity markets slipped across the board although falls were not huge. Only the Hang Seng registered a slide of more than 1%. Staying with stocks, mining giant Glencore announced a big rise in first-half earnings which came thanks to higher commodity prices.
The rest of Thursday’s economic focus will be on official UK industrial and trade figures, along with US jobless-claim data.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.