The Kiwi takes a beating this week, coming out as the worst performer among the major currencies. It was a light news week from New Zealand, so its likely that broad risk sentiment and counter currency flows were the main driver for NZD’s under performance.
New Zealand Headlines and Economic data
The Kiwi begins its broad turn lower for the week during the Asia session, and with no major catalysts seen from New Zealand, it’s likely the Kiwi took its cues from its close trading partner, Australia which saw negative updates during the session (Australia’s consumer confidence dropped 1.7 points this week, Australian employment suffers setback from second virus wave).
We also saw some risk aversion vibes during the U.S. trading session possiblyby the fall in the big U.S. tech companies and record COVID-19 related deaths across several U.S. states potentially putting pressure on the Kiwi as well.
No direct drivers can be seen from New Zealand once again, so it’s likely the falling the Kiwi took its cues from counter currency flows since risk sentiment leaned more positive than negative.
After a negative turn during the Asia session correlating with the arguably negative NZ updates above, the Kiwi bottoms out during the U.S. session and turns a corner heading into the Friday session. This is likely sparked by U.S. dollar weakness and possibly by the U.S. tech sector rally ahead of big tech earnings.