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No love for the Kiwi this week as the Reserve Bank of New Zealand slams the bulls with a rate cut that was larger than expected.

New Zealand Headlines and Economic data
Monday:
- The ANZ World Commodity Price Index fell 1.4% m/m in July – this was possibly the catalyst for the broad Kiwi move lower, but it’s also likely a reaction to the news of China halting US agricultural imports in retaliation for Trump’s tariff increase. It’s signal that the damaging trade war between the two countries may get worse and most likely, the catalysts for traders to unload relatively riskier assets.
Tuesday:
- New Zealand unemployment falls to 11-year low
- New Zealand minimum wage rise boosts private sector pay rates
- Uniform roller coaster moves for Kiwi pairs during the early Asia session, likely on global risk sentiment moves sparked first by a reaction to the U.S. officially labeling China as a currency manipulator. The turn around later came when the PBOC made moves to limit the weakness in the yuan, and likely on the very positive New Zealand employment update seen above that likely lowered probability of more stimulative efforts needed by the RBNZ.
Wednesday:
-
Global easing gathers pace as New Zealand shocks with bigger cut
- Cuts rates by 50bp vs. an expected 25bp interest rate cut
- The surprise cut does not rule out further cuts this year
Thursday:
- New Zealand could cut rates again, won’t rule out negative rates – central bank assistant governor
- A reversal of risk sentiment towards positive through the Thursday session, likely on China’s rhetoric to stabilize the yuan and the positive Chinese trade data, was probably what had traders reversing the Kiwi’s fall from earlier in the week.
Friday:
- Fall in visitor arrivals from Asia the New Zealand, but overall almost unchanged
- The bearish tilt on the Kiwi to end the week was likely on the news that the US government won’t do business with Huawei and is not ready to make a trade deal with China, sparking more trade war fears and risk aversion behavior.