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A quiet week of headlines and data from New Zealand meant that Kiwi pairs were more under the influence of counter currency moves and global risk sentiment.
New Zealand Headlines and Economic data
Monday:
- We saw a broad decline in Kiwi pairs on Monday and Tuesday, and with no major geopolitical catalysts or New Zealand data to attribute the move to, the weakness was likely a global risk sentiment move to negative after a slew of PMI updates from around the world largely disappointed (Global Manufacturing PMI at lowest level since October 2012)
Tuesday:
- Business confidence plunge: ASB predicts big rate drop
- A further fall in business confidence points to economic growth dropping
Wednesday:
- Global dairy prices fall for fourth consecutive auction
- The ANZ World Commodity Price Index fell 3.9% m/m in June, to record its first decrease this year
- Despite the weak commodity price updates during the session, we saw somewhat of a broad move higher in Kiwi pairs, arguably on the shift back to positive in risk sentiment as traders bet on global monetary policy easing among the major central banks
Thursday:
- Kiwi pairs broadly reverse back into sell mode during the Asia session. This correlated with the shift in sentiment on the Aussie dollar after Australian retail sales data did not rebound as high as expected by the markets.
Friday:
- Kiwi pairs took a dive ahead of the weekend close, likely on the strong U.S. jobs report dampening hopes of a Fed rate cut, bringing down global risk sentiment and risk assets in the process.
