Safe havens came under selling interest yesterday, while equities rose after Fed officials started leaning towards policy easing in order to prevent a steep economic slowdown. Following Bullard’s remarks that a rate cut may be “warranted soon”, Fed Chair Powell said that the Committee would respond “as appropriate” to the risks posed by a global trade war. In Australia, data showed that GDP accelerated in Q1, but the yoy growth rate declined, keeping the door open for more RBA cuts. The Kiwi rallied after RBNZ Assistant Gov. Hawkesby said that interest rates will stay unchanged in the foreseeable future.
Risk Appetite Improves on Fed-cut Remarks
The dollar continued trading lower against most of the other G10 currencies on Tuesday and during the early European morning Wednesday. The main gainers were NZD, CAD and AUD in that order, while the only currency against which the greenback managed to eke out some gains was JPY. The dollar was found virtually unchanged against NOK.
The strengthening of the commodity-linked currencies and the weakening of the safe-havens suggests that risk sentiment was positive yesterday. Indeed, major EU and US indices ended their sessions well in the...
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