Today’s Key Market Drivers – 8th August 2017

The Kiwi Dollar fell on Monday after the RBNZ 2 Year Inflation Expectation report was released and showed inflation was expected to remain subdued over the coming 2 years. This added more weight to the theory the RBNZ might lower the official cash rate to help boost inflation back above 2% over the longer term. If inflation were to remain below 2% it would be highly likely the RBNZ would be forced to lower the cash rate from 1.75%. Following is the RBNZ 2 year inflation forecast report issued on Monday.


The RBNZ meets on Thursday this week and traders will be eager to hear what Graham Wheeler and the committee says about forward guidance on the local cash rate. The expectation is that the official cash rate will remain at 1.75% this Thursday but what he says in the statement and at the press conference afterwards will be important for the short-term direction of the Kiwi Dollar. The RBNZ does have a press conference at 8.00 am AEST Thursday one hour after the release of the statement at 7.00 am AEST. The Reserve Bank of Australia is one of the only major Central Banks not to hold a press conference after it releases its monthly statement. Some Central Banks hold them bi-monthly and others hold them every month. The RBA prefers to keep a low profile and simply issues a monthly statement.

The US Dollar mostly held its ground on Monday after a better than expected jobs report last Friday. The next piece of high impacting news to likely impact the Greenback is Friday’s official inflation reading for July as well as the latest hourly and weekly earnings report for US workers. It is worth noting the US Dollar against a basket of 6 major cross currencies is down close to 9% since February this year. The fall is mostly due to the market questioning whether or not the Trump administration will be able to deliver on its pre-election promises.

There is no high impacting economic news scheduled for today however Australia will get the latest NAB Business Confidence Numbers at 11.30am AEST. There is nothing scheduled for the European and US Trading sessions worth noting.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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