The Australian dollar lost some ground in early trade but recovered well after Wall Street’s opening. This was on the back of broad US dollar weakness and a strong momentum in US equities. The Aussie suffered at the beginning of the day as political unrest in Australia continues, with the new government losing confidence despite attempts to display something different.
Meanwhile, there was some optimism around the state of global trade negotiations given that Mexico and the U.S. have concluded a deal. This brings in fresh hope for further concrete discussions for Canada and Chinese relations with the United States.
Looking to the Reserve Bank of New Zealand, Governor Orr, at the Jackson Hole, reiterated that the central bank intends to hold policy rates low for an extended period of time which is likely to keep a lid on short-term New Zealand rates and the Kiwi dollar.