Daily Morning Report 06.07.2016

The Australian and New Zealand dollars were lower against their U.S. counterpart on Wednesday, as renewed fears over the ramifications of the Brexit vote weighed on demand for riskier assets.

AUD/USD declined 0.38% to 0.7434, the lowest since June 30.

Investors were still cautious as Britain’s shock decision to leave the European Union sparked uncertainty over the consequences of the U.K. vote on the country’s economy and the global economy as a whole.

The Bank of England warned on Tuesday of “challenging” risks to financial stability following the Brexit vote and eased regulatory requirements on the banking sector.

BoE Governor Mark Carney said the move represented a “major change” that would help the economy to cope with the Brexit consequences.

Elsewhere the NZD/USD retreated 0.82% to trade at 0.7095, also the lowest since June 30.

The commodity currencies also remained under pressure after oil prices dropped sharply on Tuesday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.09% at a one-week high of 96.36.