Risk sentiment might have moved the Kiwi around last week, but we also saw that New Zealand reports could affect its price action. What’s in store for the comdoll this week?
Dairy price auction
Some time during the late U.S. session on Tuesday the bi-monthly dairy auction will take place. Prices fell for the first time in about a month two weeks ago, so commodity players will pay attention to see if dairy prices fall again and if it will lead to another downward move for the Kiwi.
Manufacturing sales (Mar 7, 9:45 pm GMT)
New Zealand’s quarterly manufacturing sales report doesn’t usually move the Kiwi’s price action for long, but the lack of other scheduled reports from the country could make traders pay closer attention to the lower-tier release.
Sales slowed down from 3.4% to 0.5% in Q3 2017. Did the December quarter fare any better?
With tons of top-tier reports AND central bank announcements due in other major economies, it’s likely that New Zealand’s news will take a backseat in favor of other catalysts.
As mentioned below, Kiwi is still very much susceptible to overall risk sentiment. Make sure you stick around and check your screens often for headlines that could affect this comdoll’s price action, aight?
Last Week’s Price Review
The Kiwi is mixed for the week (as of 8:00 am GMT). However, the Kiwi wasn’t all that vulnerable to its peers since price action across Kiwi pairs was roughly uniform.
The Kiwi’s started the week on a strong footing, likely because of the risk-on vibes at the time. However, risk aversion made a comeback on Tuesday and then persisted on Wednesday, which likely dragged the higher-yielding Kiwi lower. Although it’s worth noting that the Kiwi’s price action became more mixed during Wednesday’s U.S. session.
Most Kiwi pairs then began finding support and were already tilting higher across the board by the time Thursday’s London session rolled around, even though risk aversion continued to dominate on Thursday.
The most likely reason for the Kiwi’s broad-based strength was the news that Fonterra increased its 12-month offer volume by 3,000 tons, which should be good news for New Zealand’s dairy industry.
Some market analysts also attributed the Kiwi’s rise to New Zealand’s higher terms of trade index in Q4 (0.8% vs. 0.5% expected, 1.3% previous). If so, then the Kiwi’s rise is a delayed reaction to the report.
Whatever really sparked demand for the Kiwi, the end result is that the Kiwi went into rally mode and just shrugged off the risk-off vibes.
And this two-way intraweek price action is the reason why the Kiwi’s mixed for the week, even though price action was roughly uniform.