The Kiwi ends the week as a net loser, likely on a combination of weak economic updates from New Zealand & surprise negative developments from the U.S.-China trade story
New Zealand Headlines and Economic data
- Bearish start to the week for Kiwi pairs, and with a lack of fresh news from New Zealand, it’s possible Kiwi traders turned negative after news was released that China’s industrial profits fall 3.1 per cent in June as fears of trade war slowdown grow
- In June 2019, the seasonally adjusted number of new dwellings consented fell 3.9 percent, after rising 14 percent in May 2019
- Headline business confidence fell 6 points to net -44% in July’s ANZ Business Outlook
- China July factory activity shrinks for 3rd month
- China’s service sector activity grows at slower pace in July
- Trump announces new tariffs on $300 billion in Chinese goods – this event set global financial markets into fear and uncertainty mode as traders were caught off guard given the earlier rhetoric in the week was that U.S.-China negotiations were ‘constructive.’ The Kiwi moved broadly lower on both risk-off flows and the likely economic damage this would do to China, who New Zealand has a very large trading relationship with.