The Trump inauguration went well, allowing markets to breathe a sigh of relief and this was reflected in equities, bonds and the currencies. US equities rallied strongly, as Trump’s priorities were obviously not ‘Tariffs Day One’ on one and all. Trump signed many executive orders but trade was not on the list. This was a great relief to markets and the softer US Dollar allowed currencies to prosper. The EUR rallied well above 1.0400, while the GBP surged past 1.2300.The welcome trade news was enough to sustain a recovery in the commodity currencies. The AUD broke above 0.6250, while the NZD looked to consolidate gains around 0.5650. NZ inflation readings will be released today, and they are expected to show a continued easing of inflationary pressures, thus allowing the RBNZ to make yet another sizable cut to interest rates. These developments will limit upside gains for the KIWI.
