NZ Dollar Down as RBNZ Rate Hike Bets Fade, Fed Comments on Tap

TALKING POINTS – SWISS FRANC, NEW ZEALAND DOLLAR, FED, RISK

  • New Zealand Dollar down with local yields as RBNZ rate hike bets cool
  • Swiss Franc recovers following sentiment-driven selloff in Friday trade
  • Fed’s Bostic to speak, may set stage for FOMC minutes, Jackson Hole

The New Zealand Dollar underperformed in Asia Pacific trade. The currency fell alongside local bond yields, hinting that a dovish shift in investors’ RBNZ monetary policy outlook was responsible for the downturn. A discrete catalyst for the move was not readily apparent however.

Meanwhile, the Swiss Franc corrected higher after lagging behind nearly all of its major counterparts in Friday’s trade. That weakness seemed to have reflected ebbing worries about instability in Turkey. Contagion worries punished the Euro earlier in the week, boosting CHF as a regional havens.

Looking ahead, quiet offering on the economic data front may put a speech from Atlanta Fed President Raphael Bostic in the spotlight. He tends to be near the middle of the hawk/dove spectrum. The comments might help set the stage for FOMC minutes and the Jackson Hole Symposium later in the week.

A clear lead on the sentiment front is absent as futures tracking the FTSE 100 and S&P 500 equity benchmarks hold flat before trade resumes in London and New York. Traders would be wise to proceed with caution however, with fresh trade war and/or emerging market jitters no more than a stray headline away.

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ASIA PACIFIC TRADING SESSION

EUROPEAN TRADING SESSION

NZ Dollar Down as RBNZ Rate Hike Bets Fade, Fed Comments on Tap

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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