I don’t know about you, but I don’t see any top-tier reports from New Zealand this week! So, what could move the Kiwi in the next couple of days?
Countercurrency price action
Since New Zealand isn’t printing any major economic data, price action will likely come from top-tier reports from other major economies as well as developments in existing market themes.
A rate cut by the Reserve Bank of Australia (RBA)’s tomorrow, for example, could affect sentiment for high-yielding comdolls as it highlights bearish sentiment in the region.
And then there’s the closely-watched U.S. non-farm payrolls (NFP). Since traders are concerned over the impact of an escalating trade war with its trading partners, they will pay attention to May’s labor market trends.
Overall risk sentiment
Speaking of trade war, watch out for signs that the U.S. is willing to step up its efforts to put pressure on its trading partners. Oh, and watch out for announcements of retaliation from its peers!
In case you just tuned in, you should know that China officially started upping its tariff collections from about 5% – 10% to around 25% on $60 billion worth of U.S. goods starting June 1.
This comes after China had already announced its plans to create an “undesirable entities” blacklist similar to the U.S.’ “entities list” that banned Huawei from transacting with major U.S. firms.
While $60 billion is (mostly) peanuts to the U.S., the escalation in hostilities will likely discourage economic activity between the two of the world’s largest economies. You just know that can’t be good for export-dependent economies like New Zealand!
Missed last week’s price action? Read NZD’s price recap for (May 27 -31)!