No love at all for the Kiwi this week thanks to another lockdown in New Zealand and the possibility of a negative interest rate policy from the RBNZ grows.
New Zealand Headlines and Economic data
Monday:
New Zealand Business confidence deteriorated 10 points to -42.4%
Tuesday:
No data or major headlines from New Zealand on the session, so it’s likely the pop higher during Asia trade was a move with the Aussie after positive Australian business confidence data. But traders ended up turning on the Kiwi before the end of the session as broad risk sentiment flipped negative during the U.S. session, likely driven by U.S. stimulus uncertainty and net negative updates from the U.S. (U.S. bankruptcies on track for 10-year high with more than 100 consumer companies already filing, U.S. small business optimism falls in July)
Wednesday:
Auckland returns to lockdown as fresh coronavirus cases reported
RBNZ kept rates on hold at 0.25% as expected
RBNZ expands bond-buying program and warns of negative rates
New Zealand PM Ardern says dissolution of parliament deferred
Big spike lower in the Kiwi after the RBNZ event, but it was a limited move before recovering during the U.S. session off of improving global data (e.g., Industrial production up by 9.1% in both euro area and EU, U.S. consumer price index rose 0.6% m/m in July) and growing vaccine hopes.
Thursday:
NZ central bank official says coronavirus resurgence poses risks to outlook – The RBNZ will consider more monetary stimulus if there are periods of resurgence in local coronavirus infections and renewed lockdowns in the country.
Friday:
New Zealand Manufacturing activity hit two year high in July
Auckland prices down 0.1%, NZ up 3.4%: Real Estate Institute compares June to July sales
The New Zealand Activity Index (NZAC) is up 2% m/m in July vs. 0.6% in June
New Zealand’s Ardern extends lockdown to stamp out coronavirus outbreak