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FXBrokerFeed highlights a second week of August 2019 that saw the FX Market in consternation as the New Zealand dollar snowballed to new lows but at the same time got reprieve from stabilizing action on the Yuan. The week also witnessed central banks instituting desperate rate cutting measures to mitigate negative economic growth forced by the unrelenting tariffs war. Forex Broker comparison service FXBrokerFeed brings you the latest updates and trends in the FX Broker Market, featuring a shocking New Zealand Dollar tumble and PBoC action to stem a devaluating Yuan.
New Zealand Dollar Topple
FXBrokerFeed notes Reserve Bank of New Zealand’s decision to drop the dollar rate by 50 bps in the face of a global economic downturn. Bank Governor Adrian Orr disclosed possibility of further rate cuts in view of diminishing economic fortunes plagued by the ongoing tariffs stalemate between the US and China.
Said Orr at a press conference in Wellington, “It’s within the realm of possibility that we might have to use negative interest rates or other non-standard measures”. The news caught the market unaware as the RBNZ lowered economic prognosis to manipulate a 1-3% inflation target.
According to FXBrokerFeed, Governor Orr further revealed the banks forward momentum, which predicts average OCR slide to a 0.9% low in 2020 as good guidance as to how RBNZ saw the interest rate trend unfolding.
China Stops Yuan Slump
The Peoples Bank of China barged in to control the Yuan exchange rate and loosen grip by national currency traders. The PBoC had earlier in the week set the USD/CNY below market rate with the dollar exchanging at 7.00 above the Yuan.
FXBrokerFeed observes that the timely regulatory action at least debunked Trump’s “currency manipulator” label and brought about a positive reaction from a market getting increasingly concerned of a currency war breakout.
Additionally, China’s export trade defied predictions to post inspiring July data, according to FXBrokerFeed. It is worth noting that central banks globally are cutting interest rates to provide necessary stimulus to stem a slowing global economic growth tide.
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