​EBC Markets Briefing | Kiwi dollar jumps; gold cheered dovish Fed

The dollar was on the back foot on Thursday, with trade thinned ahead of the US Thanksgiving holiday. The Australian dollar and New Zealand dollar saw remarkable gains following fresh economic releases.

The RBNZ cut rates on Wednesday but said that a hold was discussed and flagged that the easing cycle was likely over, with markets shifting to price in an interest rate hike by December next year.

New Zealand retail sales rose in Q3, while business confidence jumped to its highest in a year. Washington announcement that it would remove additional tariffs on a range of the country's agricultural products.

Australia's inflation accelerated in October, exceeding analysts' estimates and rising at its fastest pace in seven months. The RBA expects headline inflation to peak at 3.7% in June next year.

The central bank held interest rates at 3.6% earlier this month, saying it was cautious about easing further given a stronger-than-expected recovery in consumer demand and a revival in the housing market.

Both economies are grappling with China's slowing growth, but India appears to be a silver lining. Australia reached a free trade pact with India in 2022, and New Zealand is reportedly close to a deal.

The Kiwi dollar has slipped all along since a death cross was formed in late October, but the bullish MACD divergence indicated more gains ahead. The next major hurdle is seen around $0.5770.

Asset recap

As of market close on 26 November, among EBC products, VanEck Junior Gold Miners ETF led gains. Gold and silver rose as economic data added to rate cut expectations.

A Reuters poll indicate an improving economic environment combined with still low valuations relative to the US are expected to send European stock much higher from current levels next year.

The US military is unfazed by any concerns about Boeing's supply chain. The Pentagon awarded the battered company two major contracts worth more than a combined $7 billion.

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