Collinson FX: July 10: More of a "wait and see" rather than "job done"
by Collinson FX 10 Jul 01:17 BST
10 July 2025
NZ Nationals - RS Feva - Murrays Bay - May 11-12, 2025 © Justin Mitchell
www.justinmitchell.co.nz - Instagram: @jl_mitchell_
May 10 - The Fed Minutes were released overnight and they pointed to easing on the way, with reservations over the effect of the Administrations trade/tariff policy.
Trump issued a 50% tariff on copper products and threatened a 200% tariff on pharmaceutical imports. The markets largely brushed off the everchanging trade threats and returned back to positive territory, on the equity markets.
The US Dollar was steady, with the EUR holding 1.1700, while the GBP looks to regain 1.3600.
The RBNZ followed the lead of the RBA and left rates unchanged. This is more a ‘wait-and-see policy’ than a ‘job-done’, as the NZ economy remains on struggle street. The NZ Central Bank inaction did little for the currency, which remains below 0.6000, while the AUD consolidates above 0.6500. Markets appear to have moved on from Trump trade theatrics, but further substantial action, may well be see a re-ignition.
May 9 - Markets absorbed the ever-changing dates, rules and margins, of US trade and tariff policy.
The constant threats and moving goalposts, are becoming tiresome and markets are building immunity. Trump changed the deadline from July 9th to August 1st and rate variations from 10%, to 48%.
He has sent out 14 letters, to mainly Asian nations, advising them of their new tariff rate. There is more to come, with many hoping, for the minimum 10%. It is mayhem on the global trade front, and this does little for market confidence.
European markets brushed off the threats, with the EUR trading above 1.1700, while the GBP surrendered 1.3600.
The RBA surprised market pundits and left interest rates unchanged, at 3.85%, citing international uncertainties. There are big problems on the horizon for the Australian economy, with almost all job growth over the last couple of years, coming in the public sector. The AUD was supported by the RBA move, breaking back above 0.6500, while the NZD remains below 0.6000.
Markets are expecting the RBNZ to leave rates unchanged today.
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