Positive geopolitical updates propelled Kiwi to the top spot last week. Will this week’s catalyst extend its uptrend? Or will it go back to its bearish ways? Let’s take a look at events that could affect its price action:
NZIER business confidence (April 2, 10:00 pm GMT)
The quarterly report registered a -12 reading in Q4 2017, which was way weaker than Q3’s 5 reading. Fortunately for the Kiwi, traders were more focused on overall dollar weakness and yen strength when the report was printed.
Will it make a bigger impact on the comdoll today?
Overall risk sentiment
As detailed below, positive news over China-U.S. trade relations and peace-friendly talks between Kim Jong-Un and Xi Jinping had given the Kiwi a bit of a lift. Of course, it also didn’t hurt that some traders had taken profits from their short NZD trades at the end of Q1 2018.
This week keep your eyes peeled for any catalysts that might dictate overall risk appetite. This includes updates on the Trump administration, the POTUS’ stance on global trade matters, and even the PMI reports due from other major economies.
Last Week’s Price Review
After getting whipped for two consecutive weeks, the Kiwi made a comeback and even emerged as a top-performing currency this past week.
The Kiwi started the trading week by shooting higher, likely as a reaction to New Zealand’s better-than-expected trade report, as well as the risk-on vibes at the time due to reports that China and the U.S. are trying to reason together in order to avert a trade war.
Bullish pressure quickly began to fade, though, and the Kiwi’s price action became a mixed mess before encountering broad-based selling pressure on Wednesday, likely because risk aversion made a comeback, with worries related to the tech sector being cited by market analysts for the feelings of doom and gloom.
Interestingly enough, NZD/CHF and NZD/JPY later decoupled from the other NZD pairs, apparently because of reports that North Korean Boss-Man Kim Jong Un met China’s Boss-Man Xi Jinping, which likely eased geopolitical tensions, weakening demand for the safe-havens yen and Swissy.
Going back to the Kiwi, NZD pairs later saw dip demand come Thursday, very likely because risk appetite got revived by then. And it’s this dip demand that allowed the Kiwi to win out against most of its peers. After that, Kiwi pairs behaved themselves and traded sideways as many markets closed shop for the Christian holiday on Friday.