Other major currencies are still trading rangebound
The kiwi is the main mover so far today after the RBNZ signaled that a rise in bank capital could lead to rate cuts by the central bank down the road. However, do take note that the RBNZ is communicating this message in light of plans to hike capital requirements of banks over next 5-7 years. Who knows how things would look like by then.
Regardless, that was enough to keep the kiwi pressured with NZD/USD falling by 0.5% earlier and sellers will now be eyeing a test of the daily moving averages around 0.6750.
The rest of the major bloc continues to trade more narrowly as US-China trade talks will be the focus of attention as we wrap up the week. There's little optimism nor is there any real setbacks for the time being and that is keeping markets on edge and traders have very little to work with to figure out direction for the time being.
Looking ahead, I anticipate European equities to take on more flat tones once again as we await further developments in Washington. Meanwhile, currencies are likely to also stay confined before we get US retail sales data to really shake things up.
