FX Update: NZD plunges on dovish RBNZ. GBP struggles
RBNZ pushed its dovish guidance out into 2020, a move the market wasn’t expecting, and kiwi plunged to new lows for the cycle. Elsewhere, traders can’t figure out to do with the US dollar, while the Russian ruble was sent into a tailspin on new sanctions threats.
The big dollar is flopping around with no conviction, perhaps merely owing to the increasingly low volatility summer doldrums in equity and bond markets and the lack of any of the incoming data on tap will do anything to shift expectations for the Fed’s policy trajectory. It’s a long wait for the late September Fed meeting (hike 91% priced anyway there) with the uncertainty premium greater for the December meeting – with another hike only priced at 65% odds. Elsewhere, plenty of volatility in individual currencies: