After an early week bounce, the Kiwi dollar continued to feel the pressure from recent speculation of negative rates possibly coming to New Zealand down the road, mixed with a round of negative risk sentiment sparked by the FOMC meeting minutes.
New Zealand Headlines and Economic data
The Kiwi rebounded against the majors during the Tuesday and Wednesday sessions, without an apparent catalyst. It’s possible this could have been some profit-taking after the strong bearish moves we’ve seen in the Kiwi since the RBNZ’s warning of negative rates near the beginning of August.
A strong move lower for the Kiwi during the U.S. session, correlating with the U.S. dollar strength ahead of the FOMC meeting minutes event, and with the broad risk-off sentiment after the minutes showed an unexpected dovish tone on expectations that coronavirus will ‘weigh heavily’ on the economy
Wednesday’s broad risk aversion move continued through the Thursday Asia and London session, but eventually stabilized as the U.S. dollar turned weaker after disappointing U.S. unemployment claims data.