The RBNZ left its key interest rate at a record low of 0.25%
Wall Street stocks fell overnight to snap a five-day winning streak as July retail sales dropped more than expected. Retail sales declined 1.1% last month, a steeper drop than the 0.3% dip expected after a 0.7% increase in June. In individual stocks, Home Depot fell over 4.0% after reporting second-quarter results. The company’s same-store sales rose 4.5% in the period, below the 5% consensus estimate. As such, the Dow Jones Industrial Average fell 0.8%, the S&P 500 shed 0.7%, and the Nasdaq Composite lost 0.9%.
Today in Asia, equities were mostly higher on Wednesday, with the Sydney’s S&P/ASX 200 bucking the trend to shed 0.12%. Earlier in the day, the Reserve Bank of New Zealand decided to maintain the Official Cash Rate at a record low of 0.25%, as against market expectations of a 25% hike. The Shanghai Composite Index edged 1.11% higher, the Nikkei 225 in Japan added 0.59% and the Hang Seng in Hong Kong gained nearly 0.5%.
European markets opened marginally higher today, with the pan-European Stoxx 600 index rising by just 0.1% in early deals. On the data front, U.K. inflation data for July showed an unexpected dip to 2%. Later today, the Federal Open Market Committee publishes its meeting minutes from its July meeting.
Meanwhile, the dollar looks steady after a rally witnessed yesterday despite weak retail sales data. EURUSD derived support from the 1.1700 area earlier in the day to turn marginally positive. Still, the common currency lacks upside momentum to stage a more robust bounce, with the 1.1730 capping intraday gains. Later today, the FOMC meeting minutes could affect dynamics in the pair through the dollar’s reaction to the central bank’s tone. A more dovish rhetoric would send the greenback lower across the board. In this scenario, EURUSD could regain the 1.1750 intermediate barrier.