The US-China Trade War Intensified on Friday

The AUDUSD opened at 0.6795 (mid-rate), and the NZDUSD opened at 0.6532 (mid-rate) this morning.

The AUD will be under pressure ahead of tomorrow afternoon’s RBA monetary policy statement, and the Central Bank is expected to adopt a more dovish tone in light of growing global growth concerns. The forward market is currently pricing in 38 basis points of rate cuts before the end of the year.

The market expects that the NZD will be affected negatively by Wednesday’s RBNZ monetary policy statement with a 25-basis point rate cut fully priced in. The RBNZ warned of continued concern over the impact of “subdued business sentiment” in dampening domestic spending and will be very disappointed with last week’s ANZ survey.

US News

The US-China trade war intensified on Friday after China's Commerce Ministry said that it was “strongly dissatisfied” with the US announcement, and that they “will have to take necessary countermeasures.” The additional tariffs which Trump has threatened to impose will cover almost all the goods imported from China into the US.

The USD slipped lower against the majors after the US Labour Department released its latest non-farm payroll employment report. The data showed non-farm employment increased by 164k jobs in July following on from a downwardly revised 193K jobs rise in June. The July result was in line with economists’ estimates while June’s increase  was previously reported as 224k jobs.

The University of Michigan July consumer sentiment index final reading came in at 98.4 unchanged from the preliminary reading and marginally better than June’s final reading of 98.2.

Global equity markets fell sharply on Friday, - Dow -0.37%, S&P 500 -0.72%, FTSE -2.34%, DAX -3.11%, CAC -3.57%, Nikkei -2.11%, Shanghai -1.41%.

Gold prices dipped on profit taking on Friday closing out the week at $1,440 an ounce. WTI Crude Oil prices rebounded 2.3% on Friday, closing out the week at $55.67 a barrel.

Mid-market Rates

AUDUSD0.6795-0.1%NZDUSD0.6532-0.4%AUDEUR0.6115-0.3%NZDEUR0.5878-0.6%AUDGBP0.5591-0.2%NZDGBP0.5375-0.4%AUDJPY72.41-0.9%NZDJPY69.58-1.2%AUDNZD1.04050.3%NZDAUD0.9608-0.3%GBPAUD1.78860.2%NZDCAD0.8631-0.4% GBPNZD1.86050.4%
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