RBNZ surprise markets and waits Fed Governor Powell testimony

The New Zealand dollar was the strongest currency that changed drastically this morning after the Reserve Bank of New Zealand announced its decision to keep rates unchanged at 1.00%, unexpectedly cutting interest rates to 0.75%. Despite the challenges facing the New Zealand economy with rising uncertainty, declining domestic demand, and slowing global economic growth, the New Zealand reserve preferred to slow down for a period of time before determining its destination for several reasons, including: -
1 - The growth of the labor market sector strongly and approaching employment to sustainable levels.
New Zealand's merchandise exports are improving, a key driver of economic growth.
3. The continued reduction of the NZ reserve interest rate more than once strongly from 1.75% to 1.00% helped to depreciate the value of the New Zealand dollar and thus became more competitive domestic goods in global markets.
4 - Taking the interest rate cut again will harm financial stability, which is indispensable to the bank at the moment.
The New Zealand dollar rose strongly against most of the major currencies, especially against the US counterpart to reach 0.6417, and is expected to continue buying support to push the pair to the levels of 0.6460.
Turning to Trump's speech last night, which was disappointing to markets, which expected his comments to be positive on the trade file and to emphasize the approaching of a preliminary agreement to end the trade war, which lasted nearly two years. But Trump stressed yesterday that the Chinese economy has benefited a lot over the past period, and they have even manipulated the value of their currency to stimulate exports at the expense of the US side. This has led to uncertainty and disappointment that markets are once again turning to safe havens, particularly gold, which has returned to $ 1460 an ounce.
However, it should be borne in mind that the movements of gold will remain vulnerable to changes in the US dollar, which is awaiting many important events and data, most notably the testimony of US Federal Reserve Governor Jerome Powell before the Senate this evening to talk about developments in the US economy and the Bank's vision of monetary policy in the coming period.
In the event that Powell indicated that the Bank will not take the decision to cut interest rates again and that the economic conditions are noticeably improved, especially if the inflation data to be released during positive hours will undoubtedly support the rise of the US dollar and pressure on gold trading to return to 1440 levels again. Dollars an ounce.
However, if Powell stressed the continuing risks facing the economy and that the decision to cut interest rates will remain on the table, this will affect the trading of the greenback, which saw strong gains in the past period and will be the biggest beneficiary of this decline is gold, which may then return to the levels of $ 1470 Per ounce.
The major stock indices were greatly affected by Trump's negative comments and the return of investor concern to break the German DAX to support the continued decline in the index if the current levels are broken at 13200 to 13000 levels. While the Dow Jones Industrial Average is expected to give up some of its gains to return To test level 27300.
Finally, the continued oversupply concerns on the one hand and on the other hand a slowing global economic growth is putting pressure on oil prices, which is expected to continue falling to $ 55 a barrel.