The New Zealand dollar took a tumble this week, likely driven by a turn in risk sentiment near the end of the week, and despite net positive updates from New Zealand.
New Zealand Headlines and Economic data
Global dairy prices surge in latest auction – “The auction saw a rise in all commodities on offer, with whole milk powder – the most important product for New Zealand farmers – up 5 percent, to US$3182 per metric tonne (MT).”
– Total exports of goods and services for the September 2020 quarter were $16.5 billion, down from $18.9 billion in the September 2019 quarter.
– Total imports of goods and services for the September 2020 quarter were $18.2 billion, down from $23.2 billion in the September 2019 quarter.
Global risk sentiment was leaning positive once again, possibly fueled by a combination of catalysts from around the globe (e.g., South Korea’s Economic Recovery Hints at Global Trade Resilience, Powell, Yellen call on Congress to boost economy as lawmakers seek deal) to likely help in the Kiwi’s broad move higher on the session.
New Zealand new home consents reach highest level in nearly 50 years – Almost 38,000 new homes were consented in the year to October 2020 — the highest number since February 1974, when there were over 40,000.
The Kiwi dollar took a dip during the Thursday session without an apparent direct catalyst from New Zealand. Broad risk sentiment was the likely driver for the move, likely fueled by headlines from the U.S. (vaccine expectations are dialed back, more lockdowns are called in and virus deaths makes new records).
Fonterra raised 2020 & 2021 milk price forecasts – Fonterra has lifted the mid-point of a narrowed milk price forecast to $7.00 per kg of milk solids from the previous mid-point of $6.80, driven by demand out of China.