Central Bankers met in Sintra, Portugal to discuss monetary policy and the outcome was hawkish. The message was ‘higher for longer’. Fed Chairman Powell predicted more restrictions were to come and there may be consecutive rate rises to come in the USA. This was enough to snuff out the rally in equities and boost the US Dollar. The EUR slipped back to 1.0900, while the GBP fell to 1.2540. The Bank of Japan even speculated that the Bank of Japan may raise rates, but he must have been under peer group pressure, as the Bank of Japan has been steadfast in their extremely accommodative monetary policy, over many years.
The stronger reserve and the prospect of tighter, recessionary, monetary policy hit commodity currencies hard. The AUD fell back to 0.6600, while the NZD crashed back below 0.6100. Local markets will eye the NZ Business Confidence number, set to be released today, while international markets will be watching US and European inflation data.