The Kiwi danced to the tune of its counterparts’ price action last week. Will it have a chance to set its own rhythm this week?
Here are possible catalysts for the Kiwi:
ANZ business confidence (Aug. 30, 1:00 am GMT)
The New Zealand dollar started an intraweek downtrend last month when ANZ’s report showed that about 45% of businesses expect general business conditions to deteriorate in the week ahead.
Business surveys like these not only hint at future price increases, but they also point to where businesses think consumer spending is headed towards.
Make sure you don’t miss the chance to get some pips from the release!
Overall risk sentiment
As in the previous weeks, the Kiwi is vulnerable to reacting to its counterparts’ price action.
There won’t be any major central bank announcement this week, so keep your eyes peeled for updates on the U.S.-China trade war and whether either party is planning on talking it through or remaining combative in the foreseeable future.
Also keep close tabs on the Greenback’s price action. Instability in the government is never a good thing and, with Trump’s former associates giving the tea and pleas left and right, we might see more political drama in the works.
Last Week’s Price Review
The Kiwi is turning in a more mixed performance (as of 7:00 am GMT), which is a bit underwhelming since the Kiwi was last week’s champion. The Kiwi is still a net winner at least, so the Kiwi may soon mark its second week of net gains.
The Kiwi started the week by creeping below last week’s closing prices (dashed horizontal line), which is rather wonky since risk-taking prevailed on Monday. Profit-taking after last week’s bullish run is a possible reason, though, especially since selling pressure was only limited.
In any case, the Kiwi regained its mojo when Tuesday rolled around. The Swissy did have a harder time against the euro, the Swissy, and the pound, though, but that’s another story.
Risk-taking was still the name of the game on Tuesday, but it’s very likely that the Kiwi was also benefiting at the expense of the Aussie and the Greenback.
As mentioned earlier in the weekly recap for the Aussie, selling pressure on the Aussie was mounting at the time because of political troubles in Australia. For its part, the Greenback was reeling in pain at the time, partly because of Trump talking smack about the Fed.
At any rate, the Kiwi would get a final bullish boost when New Zealand’s quarterly retail sales report came in better-than-expected.
That was the last hurrah from Kiwi bulls, however, since NZD pairs began to encounter sellers after that, causing the Kiwi’s price action to become more mixed.
And sadly for Kiwi bulls, NZD pairs (except AUD/NZD) began to tilt to the downside when Thursday rolled around, thanks to risk aversion making a comeback, largely because of the political drama in the U.S. and U.S. and Chinese tariffs coming into effect.
The Kiwi did get a brief lift when the Aussie tanked across the board, but sellers eventually won out, likely because the Greenback was also on the rise at the time.
The Greenback’s rally began to lose steam on Friday, though, so the Kiwi was able to stage a broad-based recovery (except against AUD).