investingLive Asia-pacific FX information wrap 20 Aug: NZD dumps on dovish RBNZ

It was a reasonably eventful session within the FX area with the RBNZ’s dovish shift placing stress on the NZD throughout the board.

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• Goldman cuts near-term US fuel forecasts, stays bullish on 2026 outlook
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Threat sentiment picked up the place it ended yesterday, with risk-off sentiment spilling over into at the moment’s Asia-Pac session as effectively. The strikes have been nowhere as dramatic as we noticed yesterday, however equities have remained pressured, whereas protected haven FX leads and excessive beta FX has stayed pressured.

The principle occasion for the Asia-Pac session was the RBNZ resolution, the place the financial institution took a dovish tilt by reducing the OCR to 2.5% ito accompany two extra cuts.

The explanation for the financial institution’s dovish shift comes from considerations about progress, output and the labour market, regardless of projecting a better stage of inflation in comparison with Could. The minutes of the assembly additionally confirmed that the financial institution actively mentioned the opportunity of a 50 foundation level reduce, with two members voting for a 50bp reduce as effectively.

The assertion and minutes noticed speedy stress within the NZD, with the NZDUSD buying and selling down in direction of zero.85200 (its lowest ranges since April).

In different markets, issues have been calmer, with all eyes firmly set on Friday’s Jackson Gap symposium.

The principle highlights for later at the moment is UK CPI due early within the EU session, adopted by Closing HICP information for Europe, in addition to the FOMC assembly minutes due later within the US session.

This text was written by Arno V Venter at investinglive.com.