A better-than-expected print for Australian GDP growth was unable to prevent further Australian dollar weakness on Wednesday. After a short-lived jump on the 0.9 percent second-quarter reading (0.7 percent growth expected), the Aussie fell early in the European session to a two-year low of 71.45 US cents. In the hours following GDP, it also lost value against six of the seven other majors.
According to experts at Nomura, there wasn’t much that an upbeat GDP reading could have done for the Australian dollar. Per the Business Insider, the bank’s long list of reasons for Aussie uncertainty includes a cooling housing market, rising funding pressures, an increase in variable mortgage rates, easing global growth momentum, emerging market pressures and a Chinese economic slowdown.
In Canada, Prime Minister Trudeau is now seemingly playing the UK’s “no deal” card. Trudeau indicated on Tuesday that no NAFTA would be better for Canadians than a bad NAFTA.
Ahead of Wednesday’s meeting of the Bank of Canada, at which interest rates are expected to be left unchanged at 1.5 percent, recent weakness in the Canadian dollar persists. Over the past couple of weeks, USD/CAD has risen back to 1.32 and EUR/CAD heads confidently towards 1.53, although those rates remain close to 2016-2018 averages. The loonie fell on Wednesday to a five-month low versus the Swiss franc—it now buys only 73.8 Swiss rappen.
In New Zealand, wagers on an interest rate cut are growing at an alarming rate. “The chance of the Reserve Bank lowering the official cash rate in February has risen to 30 percent from virtually zero a month ago, according to swaps data,” reports Bloomberg’s Tracy Withers.
Like its Australian cousin, the New Zealand dollar fell to more than two-year lows versus the US dollar on Wednesday. When last seen, the kiwi fetched only 65.4 US cents; it also nears a three-year low versus the euro, at only 56.5 euro cents.
New Zealand dollar bulls were left dismayed on Tuesday after global dairy prices fell for the sixth time in the last seven auctions. Last week, ANZ reported New Zealand business confidence at its lowest level in ten years.
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