The overvalued Kiwi continues to hinder growth in the traded sectors. Given that New Zealand is a commodity exporter, the Kiwi has yet to adjust to lower commodity prices in order to be more globally competitive.
New Zealand has been the first developed country to raise interest rates from record low. Last July, the central bank increased interest rates by 25 basis points for the fourth consecutive time this year.
As a commodity exporter, the RBA has been pushing for lower rates with the intention of making their exports more competitive. Two months ago, the central bank head announced that he’d prefer the Aussie to be at cents.
Today, the Swiss National Bank will assess their monetary policy. The monetary policy decision and the press conference to be held afterwards will possibly affect the Swiss Franc. A more dovish than expected statement could soften the Swiss Franc.
In its most recent rate statement, the Reserve Bank of Australia decided to keep interest rates at as expected. This is on the basis that the Aussie remains overvalued considering the decline in commodity prices.
The speculation of a delay in an interest-rate hike will influence the US Dollar to weaken further especially if the release tomorrow shows a lower-than-expected inflation data. A buy stop position in GBPUSD is recommended.
The Canadian economy is expected to have contracted by due to the effect of falling oil prices. The BOC projects a yearly growth of in 2015 from growth in The confirmation of a contraction in the Canadian economy could weaken the Loonie further.
iven that about 70% of UK economic output is from services, the data is a gauge of UK’s growth in the final quarter of the year. In the third quarter, UK’s economic growth slowed to 0.7% from second quarter’s 0.9%. The main driver of economic growth in the third quarter was from the services sector which was reported to have contributed 0.58 percentage points to the increase in GDP.