The People's Bank of China (PBOC) recently lowered the seven-day reverse repurchase rate from 2.55% to 2.5%.
Risk sentiment improved after China cuts rate, long USD/JPY?
Antipodean currencies continue to weaken despite an improvement in risk sentiments as the slowdown in both Australia and New Zealand becomes evident through data.
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With RBNZ likely to cut rates tomorrow to 0.75% alongside RBZ’s current interest rates, NZD could remain dovish.
President Trump said last Friday that he has not agreed to scrap tariffs on Chinese goods which dampened global outlook. Safe-haven currencies could strengthen.
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With the backdrop of political chaos, slowdown in global economic growth and the delay in Brexit, some of the policymakers may vote for an immediate rate cut. GBP/AUD may continue its downtrend.
With no further rate cuts by RBA this year and an improvement in risk sentiment, Aussie dollar could rise higher until the end of 2019.