With no catalysts from New Zealand this week, it was all about risk sentiment and counter currency flows for the Kiwi. Unless you’ve been under a rock, then you know traders were mostly influenced by the Coronavirus story this week, which drove traders far away from “risk assets” like the New Zealand dollar.
New Zealand Headlines and Economic data
- Major global risk-off sentiment to start off the week after the mayor of Wuhan, epicenter of coronavirus outbreak, says 5 million people left the city before travel restrictions were imposed. This was likely the catalyst for the the weak opening in the Kiwi, with exception against the Kiwi, which is usually considered the “risk asset” between the two.
- Risk aversion sentiment grows as China confirms 2,700 cases of virus, 40 counted elsewhere.
- Risk aversion behavior picked up quickly on the session and was likely what pushed the Kiwi lower, once again on Coronavirus fears as there was nearly 1,500 new cases in a few days and the death toll rose to 132.
- New Zealand monthly trade balance was a surplus of $547 million
- Coronavirus declared global health emergency by WHO
- Risk aversion accelerates once again during the Friday session as the US raises travel warning, Singapore bans Chinese travelers as outbreak spreads. Also, the U.S. declares coronavirus a public health emergency.