FOREX: NZD Consolidates Sharp Move Lower Following Dovish RBNZ
Aug-20 16:55
- The New Zealand dollar has been under significant pressure Wednesday, after the RBNZ committee voted to reduce the OCR by 25bps to 3.00% and two members voted for a larger 50bp interest rate cut. NZDUSD extended the week’s depreciation, extending down to a four-month low of 0.5815.
- Exponential moving average studies have moved into a bear-mode position and today’s move through the May lows bolsters the short-term bearish momentum. The 50% and 61.8% retracements of the April-July price swing are the next notable support levels, located at 0.5803 and 0.5728 respectively.
- Additionally, EURNZD has risen back above the psychological 2.00 mark to trade at its highest level since 2010. A previous attempt above this level in April provided an abrupt top for the cross, before a swift 6% reversal ensued. Given the longer-term significance of current chart levels, EURNZD may be at an important inflection point. Should spot close above 2.00, momentum demand could signal scope for a much stronger rally, potentially targeting 2.1249, the 61.8% retracement of the 2009-2015 range.
- Higher-than-expected inflation data in the UK provided only momentary support for GBP, which then reversed steadily lower across the session. Leaving the UK with one of the highest core rates of inflation in the G10, market sentiment appeared to sour towards sterling. As such, GBPUSD looks set to extend its losing streak to three sessions, sliding back towards 1.3450 as we approach the APAC crossover.
- After creeping to a new weekly high at 98.44 overnight, the USD index slipped back into moderate negative territory on Wednesday. Markets appear to be adopting a more neutral position headed into Friday's Jackson Hole appearance from Chair Powell, while headlines from Trump calling for Fed Governor Cook’s resignation represent a developing risk to monitor.
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OPTIONS: Bund Outright Put Buying And Combo, Large Sonia Call Spread Monday
Jul-21 16:52
Monday's Europe rates/bond options flow included:
- RXQ5 129.50/130.50 combo paper paid 13 on 3.5K, buying the calls, selling the puts
- RXQ5 128.50 puts paper paid 3 on 4.8K
- SFIZ5 96.65/96.75 call spread paper paid 0.75 on 10K
US: Rep Luna Refers Chair Powell To DOJ On Perjury Charges
Jul-21 16:38
Rep Anna Paulina Luna (R-FL) has referred Federal Reserve Bank Chair Jerome Powell to the Department of Justice, accusing him of two counts of lying under oath related to the ongoing renovation project at the Fed's Washington D.C., headquarters, per Fox News. Luna, a close ally of Trump, appeared to get ahead of the White House by announcing on X Powell's "imminent" dismissal last week.
- Luna wrote: "On June 25, 2025, Chairman Powell provided testimony under oath before the Senate [Banking] Committee regarding the renovation of the Federal Reserve’s Eccles Building. In his statements, he made several materially false claims."
- Luna previewed the referral in a message on X on July 17: "I am criminally referring Jerome Powell to the DOJ to investigate perjury regarding his crazy $2.5BN building."
- Treasury Secretary Scott Bessent told CNBC this morning that he will “be at the Fed on Monday,” adding that the “entire Federal Reserve institution” needs to be examined. When asked about President Trump forcing Powell out, Bessent said he is “not going to engage in hypotheticals”.
- In an apparent response to the White House accusations, the Fed updated its website today with a new section detailing the DC renovation project.
- Former Fed lawyer Cornelius Hurley told MNI that Powell would likely prevail in court and get to serve out his term even if Trump goes through with threats of firing him. See: MNI INTERVIEW: Powell Would Win In Court If Trump Fires Him
OPTIONS: Larger FX Option Pipeline
Jul-21 16:35
- EUR/USD: Jul23 $1.1790-00(E1.4bln), $1.1850-70(E1.3bln); Jul24 $1.1620-30(E4.0bln), $1.1645-55(E2.0bln), $1.1700(E1.8bln), $1.1750-60(E1.1bln); Jul25 $1.1740-50(E1.2bln)
- USD/JPY: Jul23 Y146.55-65($1.2bln), Y148.00-20($1.4bln); Jul24 Y147.00-10($1.1bln), Y147.50($1.5bln)
- USD/CAD: Jul23 C$1.3625-40($1.1bln); Jul25 C$1.3700-20($1.2bln)
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