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Rising geopolitical tensions, budget hackings, and weak economic sentiment had traders turn sour on the Kiwi after an early positive start.

New Zealand Headlines and Economic data
Tuesday:
- New Zealand Treasury says ‘deliberately hacked’ after budget details leak
- Government concedes some of National’s Budget 2019 details correct
Wednesday:
- New Zealand Financial Stability Report May 2019
- NZ government blames hackers as budget leaked to opposition
- RBNZ Governor Orr says ‘open-minded’ on proposed bank capital requirements
- NZ central bank says current mortgage curbs appropriate, risks remain elevated
- Headline NZ business confidence (up 6 to net -32%) in May versus a previous read of -37.5%
- Broad Kiwi weakness during the European trading session, likely on the combination of weak New Zealand sentiment updates, global risk aversion rising on negative developments on the U.S.-China trade front, and possibly on weakness in the Aussie as multiple future rate cuts from the RBA is being debated in the market.
Thursday:
- New Zealand’s 1st ‘well-being budget’ targets mental health
- What’s in Budget 2019: Benefits to increase, most school donations scrapped, $2b for mental health
- New Zealand building consents fall -7.9% m/m
- China says US trade provocations are ‘naked economic terrorism’
- China makes next move in trade war, reportedly halting US soy purchases – more negative U.S.-China trade developments sparks further global risk aversion behavior, and likely the catalyst for the broad weakness in Kiwi pairs during the London & U.S. session.
Friday:
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S. quickly, hence the risk-off behavior and yen rally. This hit the U.S. dollar pretty hard on the session as it all potentially leads up to Fed rate cuts, and a weak Greenback is likely why we saw the Kiwi rally during the morning U.S. session.