Without major drivers from New Zealand for the Kiwi this week, it was all about global risk sentiment and counter currency flows that had NZD net positive going into the weekend.
New Zealand Headlines and Economic data
- New Zealand Braces for Economic Hit as Chinese Tourists Banned
- NZ Treasury Monthly Economic Indicators for January: Improvement in global outlook set back by coronavirus outbreak
- Global risk sentiment started off positive this week, likely due to the news of stimulative efforts from the People’s Bank of China to support the likely hit China will take due to the Coronavirus outbreak.
- Global dairy prices are down -4.7% since Jan. 21
- Risk-on sentiment accelerated on Tuesday to send the Kiwi higher, most likely on news that a vaccine for the Coronavirus is ready for testing and further stimulus efforts from the PBOC.
- NZ unemployment has fallen to 4.0% from 4.1%, while wages have risen by 2.6%, which is the most since 2009; RBNZ seen as putting interest rates on hold
- We can see a broad spike higher in the Kiwi during the Wednesday session, possibly related to the news of a breakthrough in the race for a vaccine by a British scientist pushing global risk sentiment further positive.
- 2-year inflation expectation in New Zealand higher in Q1 2020
- Coronavirus related fears sent risk sentiment back to the negative on the Friday session on news that 41 passengers on a cruise ship quarantined off Yokohama test positive for coronavirus, and concerns the outbreak will do much more economic damage to China than previously anticipated. The New Zealand dollar fell on the reversal of sentiment, but not enough to turn it red against most of the majors for the week.