The New Zealand dollar takes the top spot this week on counter currency flows, positive economic updates supporting global risk-on sentiment, and a slight improvement in the rate of growth of consumer prices in New Zealand.
New Zealand Headlines and Economic data
- New Zealand visitor numbers down in May
- The services sector in New Zealand expanded at a slower pace in June to 52.7, down from 53.5 in May
- China June industrial output up 6.3% year-on-year, beats forecasts, retail sales up 9.8% – Without direct catalysts from New Zealand, the pop higher in the Kiwi against the majors is likely sparked by positive news from one of its largest trading partners in China, which also lifted the Aussie at the same time.
- New Zealand consumer prices rise 0.6% q/q, 1.7% y/y – this matches the RBNZ’s estimate of 1.7% y/y, but slightly below the mid point of their target 1% – 3% range. Still, it’s a better-than-previous read, hence the broad move higher in the Kiwi against the majors over the next few hourly bars.
- Global dairy prices jump 2.7%, ending two-month losing streak
- Without a direct catalyst from New Zealand, the strong move higher, it’s arguable that the Kiwi rallied higher into the Thursday Asia session after a combination of the Australian unemployment rate not rising above 5.2% (less pressure for RBA to cut) and the better-than-expected NAB business confidence survey lifted the Aussie higher.
- Global risk sentiment was on the rise on the session and possibly supportive of the Kiwi on the session, an environment that was likely on some combination positive U.S. economic updates, positive developments on the U.S.-China trade front, and rhetoric from Federal Reserve officials that supported a U.S. interest rate cut at the end of July