The US dollar slides and then rebounds after conflicting comments from Donald Trump and his Treasury Secretary Scott Bessent. ANZ Research now sees the RBA hiking next Tuesday, and ANZ lowers its house price inflation forecast in New Zealand
In our Deep-Dive interview, ANZ Group Chief Economist Richard Yetsenga explores the lessons of Brexit for the United States as it reorders its trade relations with the world.
5 things to know in 5 minutes:
The US dollar was in turmoil again overnight after US President Donald Trump told reporters he quite liked the US dollar being weak. Then US Treasury Secretary Scott Bessent had to walk back Trump’s comments.
ANZ Economist in London Henry Russell says the intervention chatter is likely to fade, leaving a deeper conversation about hedging risk in US assets.
All this talk about a weaker dollar and the debate over the ‘Sell America’ and the ‘Debasement’ trade added to upward pressure on gold overnight. It rose 4% to a new record high of US$5,335/oz, says ANZ Economist Henry Russell.
ANZ Research has changed its call for the Reserve Bank of Australia’s cash rate, and now sees a hike on February 3 of 25 basis points. But it’s a single ‘insurance’ tightening, rather than a series of hikes. That came after trimmed mean inflation in the December quarter was reported at 0.9% for the quarter and 3.35% from a year ago, which was above the RBA’s forecast of 3.2%. The news came as ANZ’s Roy Morgan Consumer confidence survey last week rose 4.7 points to 84, but remains below the long-run average of 109.3, says ANZ Economist Sophia Angala.
ANZ Research has also changed its forecast for house prices in New Zealand, lowering its expectation of house price inflation in 2026 to 2% from 5%, says ANZ Senior Economist Matt Galt.
Cheers,
Bernard.
Catch you tomorrow with analysis of the Fed decision, and how US monetary policy is diverging from others.
