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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. 

Overlay of NZD Pairs: 1-Hour Forex Chart
Overlay of NZD Pairs: 1-Hour Forex Chart
NZD Weekly Performance from MarketMilk
NZD Weekly Performance from MarketMilk

New Zealand Headlines and Economic data

Monday:

New Zealand Services PMI: unchanged in July at 54.3 vs. June (seasonally adjusted)

New Zealand Election Delayed Amid New Coronavirus Outbreak

Tuesday:

Economists at ANZ and ASB now see the Reserve Bank taking the Official Cash Rate negative next year

Global dairy prices fall 1.7 percent as ‘period of high uncertainty’ continues

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.

Wednesday:

New Zealand Producer Price Index in the June: input PPI fell 1.0%, while the output PPI declined 0.3%

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

Thursday:

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.

Friday:

Move to negative interest rates will depend on health of economy – RBNZ chief economist

New Zealand Credit Card spending: -5.8% y/y in July 2020