The New Zealand dollar takes the crown this week thanks mainly to a swing positive in global risk sentiment and to U.S. dollar weakness after the Fed Chairman signals a rate cut soon.
New Zealand Headlines and Economic data
- Kiwi pairs ticked lower during the U.S. trading session, possibly on weakening global risk sentiment as geopolitical tensions rise in the Middle East (concerns over Iran restarting uranium enrichment)
- New Zealand Food prices fell 0.7 percent in June 2019
- Somewhat of a broad bullish move higher in the Kiwi against the majors, likely the back of Fed Chair Powell’s comments on the session that virtually guaranteed in traders’ minds that a rate cut was on its way at the end of July. This not only supported the Kiwi as an anti-dollar trade, but also from a global risk-on sentiment angle as well through out the rest of the week.
- A brief pullback in Kiwi pairs during the U.S. session is arguably a reaction to U.S. dollar strength, a move sparked by the better-than-expected U.S. CPI data released earlier in the session
- New Zealand’s BNZ Manufacturing PMI rose to 51.3 in June 2019 from an upwardly revised 50.4 in the previous month – this news brought Kiwi pairs back into rally mode after the brief Thursday U.S. session pullback
- After another brief and inexplicable pullback in Kiwi pairs during the morning London session, it looks like Kiwi pairs saw one last broad bullish push higher during the U.S. session. This is likely on the combination of more Fed rate cut rhetoric from Fed members, and the combination of positive economic updates from China earlier in the session (including a China June trade surplus with U.S. rising 11% to $29.92 billion) and the positive NZ manufacturing index update.