Summary:
- Dow Jones suffered in the wake of the Fed FOMC.
- RBNZ interest rates are now at 3%.
DJI Closed in the red on Wednesday
After the Fed minutes were released, the Dow Jones Industrial Average recovered from its lows. After Elon Musk, CEO of Tesla (TSLA), made a statement, Manchester United (MANU) regained a crucial level. As Bitcoin declined, so did Coinbase (COIN) and Riot Blockchain (RIOT). There weren't many breakouts among the conflict. Denbury (DEN), an energy play, was able to rise above a buy mark as its relative strength line accelerated. Also monitoring its own entrance is Wesco International (WCC).
DJI Price Chart
RBNZ pushed interest rates to 3%
The market's reaction to the Reserve Bank of New Zealand's (RBNZ) August policy update and guidance led to a sell-off of the New Zealand Dollar. The Reserve Bank of New Zealand (RBNZ) signaled it will raise interest rates to levels higher than they had previously been expecting. On paper, the RBNZ did everything it could to back NZD bulls: it said that the economy was in good shape, that inflationary pressures were widespread, and that it would continue to raise interest rates. As the RBNZ suggested they will need to raise rates higher than they had previously thought, short-term New Zealand bond yields increased. Two additional rises of 50 basis points are now likely to occur throughout the course of 2022, and a smaller hike may occur in early 2023. The Pound to New Zealand Dollar fell by two thirds of a percent in the 15 minutes following the decision.
The drop in the value of the Kiwi dollar may indicate that the market foresaw everything the RBNZ did, allowing investors to quickly shift their focus from domestic factors to international events. We observe that sentiment is low in midweek trading, with equities markets down and commodity prices falling. Even more so than the New Zealand Dollar, the Australian Dollar is also falling; in fact, it is the greatest loser of the day.
Sources: poundsterlinglive.com, finance.yahoo.com, investors.com
