Markets have begun pricing in a potential rate hike by the Reserve Bank of New Zealand after two important economic releases, the GDT Price Index and CPI q/q, showed the NZ economy to be heating up after both came in higher than expected. The NZD has gone bid as we see traders buying the currency across the board to account for the improved conditions.
Elsewhere, crud oil prices dipped back below $51 per barrel after the US crude oil inventories came in line but with the report showing an uptick in supply which led to the selloff as market priced in the increased levels. Gold also experienced a sell off yesterday as we saw bears mange a retest of the 1273 support level. However, the gains where short lived as we saw the bulls fight back amid geopolitical factors which saw US officials announce that a Russian think tank undermined the US elections. The precious metal will continue to strengthen if geopolitical factors heat up as trader flow to the relatively safety of the metal.
The GBP found its feet to retake 1.2800 after the UK snap election in June was confirmed with a majority of parliament voting that the election should take place. The pound will remain sensitive to news and comments out of the UK regarding the election and Brexit with traders quick to dump the GBP if risk increases.
Today sees key data out of the US which USD bulls will be hoping come in better than expected so that they may have a chance at recovering their recent losses. However, worse than expected releases will see the USD tank further. Later in the day we have the BOE Gov Carney and the US Treasury Secretary speaking at the Institution of international Finance Policy Summit. Both will give clarity as to their respective countries economic policy which will impact their respective currencies accordingly. A more hawkish statement will result in an strengthening of their respective currencies and vice versa on a more dovish economic policy.