Daily Morning Report 22.03.2017

The Australian dollar slipped lower against its U.S. counterpart on Wednesday, but losses were expected to remain limited as sentiment on the greenback remained vulnerable, while the New Zealand dollar held steady ahead of the Reserve Bank of New Zealand’s policy decision.

AUD/USD slid 0.27% to 0.7670, off a one-week low of 0.7651 hit overnight.

The greenback weakened after Chicago Federal Reserve President Charles Evans said on Monday that the Fed is on track to raise rates twice more this year, underlining the view that the central bank will stick to a gradual pace of tightening after last week’s rate hike.

The dollar was also vulnerable after G20 financial leaders dropped a pledge to keep global trade free and open during talks this weekend, following opposition from the increasingly protectionist Trump administration.

The move renewed uncertainty over U.S. trade relations and by extension the Trump administration’s concerns over the strong dollar.

NZD/USD was little changed at 0.7034.

Market participants were looking ahead to the RBNZ’s policy meeting, scheduled on Thursday and during which the central bank was expected to leave interest rates unchanged.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 99.61, just off a six-week low of 99.45 reached overnight.