The New Zealand dollar comes out of this week as a net loser, hurt by a disappointing inflation update from New Zealand and broad risk sentiment arguably more net negative than positive throughout the week.
New Zealand Headlines and Economic data
The Kiwi broadly moved lower during the U.S. session as risk sentiment flip back to negative after news broke of California closing a variety of businesses back down.
Global risk sentiment moved towards positive during the U.S. session, which likely was a contributor to the Kiwi’s move higher. This was likely sparked by positive vaccine news from Moderna and positive earnings numbers from U.S. equities.
New Zealand quarterly CPI down by 0.5% as expected in Q2 – this was the likely driver for the New Zealand dollar’s broad move lower through the Thursday session. Global risk sentiment also flipped negative during the U.S. session on a combination of negative U.S. economic data (U.S. Weekly jobless claims rise by more than 1 million for 16th straight week) and geopolitical news (U.S. Weighs Sweeping Travel Ban on Chinese Communist Party Members) to likely add to the Kiwi’s woes.
The Kiwi moved a bit higher on the session, possibly on a combination of improving business sentiment from New Zealand (Business NZ manufacturing index up from 39.8 to 56.3), and possibly on positive comments from the Director of the National Institute of Allergey and Infectious Diseases (Dr. Fauci is optimistic we’ll see COVID vaccine breakthroughs by early Fall) that brought in some risk taking.