The US dollar roared higher on Wednesday following some hawkish comments from Federal Reserve Chair Jerome Powell, following the US central bank’s latest interest rate decision.
Given that the RBA has expressed anxiety over the state of the labour market in previous months this development prompted the Australian dollar to slide.
As both the manufacturing and services PMIs showed a contraction in February investors were left with little reason to support AUD exchange rates.
In the absence of any major domestic data the New Zealand dollar struggled to find any particular support, trending lower in line with market risk aversion.
Wednesday’s set of New Zealand trade figures may push NZD exchange rates lower, though, as the trade balance looks set to record a deficit.
Fresh evidence of the weakening trade outlook could weigh heavily on the New Zealand dollar, particularly if market anxiety over Covid-19 persists.
However, the Australian dollar could find some support against its rivals this week if fourth quarter private capital expenditure rebounds as forecast.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)