The Kiwi dollar ended the week in the middle of the pack as it lacked major drivers from NZ to give it a boost against the majors.
Major Market Drivers for the New Zealand Dollar
Global risk sentiment and counter currency influences were likely the main driver for Kiwi pairs this week as New Zealand lacked any major economic or headline catalysts for NZD pairs to feed off of. For a broader rundown of what drove global risk sentiment, check out my review of this week’s risk sentiment drivers and its effects on market behavior in my Japanese yen weekly review here.
In short, we saw early risk-off sentiment to start the week (and likely the reason we saw the Kiwi dollar under perform more against the safe haven currencies like USD, JPY, & CHF), but traders turned bullish from Wednesday on a slew of developments including a dovish FOMC statement and improving U.S.-China trade talk sentiment from U.S. Treasury Secratary Mnuchin.
Positive global risk sentiment remained into the close of the week, and is likely the reason why we saw the Kiwi’s performance against the safe havens outshine its performance against the high-yielders, although there seems to have been broad Kiwi selling into the Friday close for reasons that don’t seem to be clear at this time. Overall, the Kiwi ended up positive against all of the majors with exception to the Australian dollar and Canadian dollar to take the third spot in overall wins against the majors.