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Good morning. In 1999, the Euro was officially introduced as a currency, debuting in electronic form for trading and banking. Physical notes and coins didn’t arrive until 2002.

It quickly became the world’s second-most traded currency, right behind the U.S. dollar.

-Shaun A, Jonathan Kibbler, Jordon Mellor

MARKETS

How’s your favorite today?

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

NEWS

Rate Cuts or Not?

The Fed’s July minutes show a central bank divided and traders are paying close attention. Some policymakers want to start cutting, worried about cracks in the labor market. Others remain focused on sticky inflation and the risks of Trump’s tariff storm.

Here’s what you need to know so far:

1. A Rare Split Vote

🗒️ #FOMC Minutes:

Bowman and Waller's dissents did not include a weak labor market which suggests they might actually be in favor of a 50 bps cut in September given the bad July employment data.
— #MTS Insights (#@MTSInsights)
6:08 PM • Aug 20, 2025

For the first time in more than 30 years, two Fed governors, Christopher Waller and Michelle Bowman, voted against holding rates steady. They wanted cuts, signaling real concern that the jobs slowdown could get worse without policy support. The rest of the committee chose patience, keeping the fed funds rate pinned at 4.25–4.5%.

2. Tariffs Cloud the Inflation Picture

Trump’s trade war loomed large over the discussion. Officials admitted they don’t fully know how tariffs will filter into prices, whether through higher import costs, disrupted supply chains, or shifting expectations. That uncertainty left most members leaning toward inflation risks as their top concern.

3. Cracks in the Jobs Market

Even before the weak July payrolls report (and downward revisions to prior months), Fed members were flagging trouble in the labor market. Slower consumer spending, softer hiring, and early signs of job market weakness raised alarms. The minutes noted that “downside risk to employment had meaningfully increased.”

4. Politics Turn Up the Heat

Trump continues to pressure Powell and the Fed, blasting them on social media and demanding faster rate cuts. On top of that, the White House will soon appoint another Fed governor after Adriana Kugler’s resignation. Traders know politics and policy are colliding, adding uncertainty ahead of Powell’s keynote at Jackson Hole this week.

Here’s the Takeaway

The Fed is walking a tightrope. Inflation risks tied to tariffs are keeping some officials cautious, while others see the labor market deteriorating faster than expected. With Trump turning up the heat and Powell set to speak at Jackson Hole, markets could get fresh clues on whether rate cuts are finally coming, or whether the Fed stays on pause.

-Shaun A

From Italy to a Nasdaq Reservation

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FOREX

The Weakest Currency Right Now?

The kiwi got smacked today.

NZD/USD is down nearly 2% this week, with a big chunk of that coming overnight when the pair dropped 1.2% straight into a key support zone of 0.5800. If this level gives way, the downside risk opens up fast, all the way toward the 0.5600 handle.

Why did NZD fall so hard?

Everyone expected the 25bps cut by the RBNZ from 3.25% to 3.0%. What took the market by surprise was the tone that came with it.

RBNZ went full dovish: They lowered their projected floor for rates to 2.55% down from 2.85%, signalling more easing to come.
Split inside the committee: Two members actually wanted a bigger 50bps cut, showing how cautious the Bank really is.
Economic outlook cut down: Forecasts for growth, jobs, and wage growth all got marked lower, confirming a weaker picture for New Zealand’s economy.

Markets wasted no time repricing. Traders are now betting on another cut in October, and by November, markets are fully pricing in more easing.

What this means for traders

This week’s action confirms what my strength meter flagged earlier: NZD is the weakest currency out there right now. And the RBNZ just gave bears even more ammunition.

But here’s the setup I'm watching.

If the support of 0.5800 breaks it could lead to some further downside, potentially down to 0.5600 or 0.5550.

Alternatively, if the price finds support and rebounds then the recent highs near 0.6000 could be a resistance level to watch.

My thoughts

If the kiwi is going to come under further pressure fundamentally I could look to try and take advantage of the weakness against stronger currencies. It may turn out to be that NZD/USD remains choppy due to both economies being weak. So we could turn to another market. For instance the EURO and GBP is strong, this could be where we target the NZD weakness.

-Jonathan Kibbler

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