U.S.-China trade developments were a big influence on the Kiwi this week, that is until we saw a strong mid-week move on New Zealand housing data.
Major Market Drivers for the New Zealand Dollar
Choppy start to the week as the Kiwi kicked off with early week weakness into a small rally to the upside on broad global risk-on sentiment, both moves likely influence by China headlines (the former on China’s slowdown in exports before strength on improving U.S.-China trade developments).
Unfortunately for Kiwi bulls, it was downhill from there, most likely on the latest New Zealand housing data from the Real Estate Institute of New Zealand (REINZ) showing that December was “extremely quiet” with the lowest sales volume in seven years. It’s a pretty gloomy headline, but all is not dreary as home prices are up on average and expectations are up for the housing market in 2019 as the RBNZ is set to loosen up rules around housing lending.
Despite the rays of sunshine, focus seems to only been on the headline number as the Kiwi continued to fall into Thursday’s trade, even with global risk sentiment rising (possibly on reduced “no-deal” Brexit speculation and continued easy monetary policy sentiment) which is usually a positive for the Kiwi.
Kiwi bulls did try to make a comeback at the end of the week, possibly with the help of a positive New Zealand manufacturing sentiment report and couple more U.S.-China trade related headlines (possible tariff lift by U.S. on China, and China’s proposal to eliminate trade imbalances with the U.S.) that sparked quick pops higher, but it wasn’t quite enough to get the New Zealand dollar back in the green, making it the biggest loser of the week!
New Zealand Headlines and Economic data
- New Zealand Institute of Economic Research’s (NZIER) business sentiment stays negative in Q4
- December house sales hit lowest level in 7 years: REINZ
- Food prices rise in 2018
- New Zealand business sentiment improves but stays negative in Q4
- New Zealand’s manufacturing activity survey picks up in December