With a lack of major catalysts from New Zealand it was pretty much a lackluster week for the Kiwi dollar in terms of volatility, which eventually ended as a net loser after Friday’s risk-off session.
New Zealand Headlines and Economic data
Broad weakness for the Kiwi during the London session and with no direct catalysts to be seen, it’s possible the move lower was on U.S. dollar strength. The move bottomed out during the U.S. session and reversed slightly, likely due to rising risk-on sentiment (broad U.S. equity strength (once again lead by the tech sector) and/or positive coronavirus news (Eli Lilly starts late-stage study of coronavirus drug in nursing homes).
Big spike higher in the Kiwi against the majors after the positive NZ jobs data, but traders turned net bearish on NZD during the U.S. session, possibly on risk-off vibes sparked by the much weaker-than-expected U.S. jobs read from ADP.
We saw the Kiwi rally against the majors during the Thursday U.S. trading session, possibly on another round of risk-on sentiment after the better-than-expected U.S. unemployment claims? Or hopes of a new U.S. stimulus deal before the end of the week?
No major headlines from New Zealand on Friday, so it’s likely the broad move lower in the Kiwi against all the majors was influenced mainly by global risk sentiment, driven on the session by rising geopolitical tensions between the U.S. and China, and/or the eventual failure of the U.S. government to come up with a stimulus package before the end of the week.