In a mostly quiet week of economic data and headlines from New Zealand, NZD took the top spot this week thanks to another solid round of positive global risk sentiment, and possibly on positive Kiwi sentiment stemming from New Zealand being nearly coronavirus free!
New Zealand Headlines and Economic data
On top of the idea New Zealand is nearly coronavirus free, it’s likely the Kiwi’s move higher was on traders continuing to focus on the “reopening trade” and better-than-expected Chinese manufacturing PMI data, rather than the continued U.S.-China tensions (China cuts US ag purchases) & mass U.S. protests over the weekend.
Despite the weak NZ economic updates above, the Kiwi continued its rally on Tuesday thanks to more positive global risk sentiment (“reopening theme” & continued expectations of massive central bank/government stimulus). And it might have gotten a little extra help from news that China bought U.S. soybeans after halt to U.S. purchases ordered, easing U.S.-China tensions a bit for traders.
The Kiwi pulled back slightly during the Wednesday London session, correlating with the release of European and UK PMI data (improving but still showing severe contraction). Risk-on came back during the US session on a refocus back to the “reopening trade,” covid vaccine developments (US should have a “couple hundred million” doses of a Covid-19 vaccine by start of 2021, Fauci says), and possibly on optimism from the Bank of Canada.
No major catalysts for the Kiwi on Thursday, but we did see an overall bump higher in NZD during the U.S. trading session, correlating with the latest statement from the European Central Bank that drew positive risk sentiment behavior after ramping up its pandemic bond buying to 1.35T euros.