Mixed week for the Kiwi against the majors, ultimately ending up as a net winner. With net negative economic updates from New Zealand and commentary from the RBNZ, Kiwi traders likely focused on positive risk sentiment and counter currency flows.
New Zealand Headlines and Economic data
Despite disappointing housing data from NZ, the Kiwi found a bid on the session against the majors. It was likely riding broad positive risk sentiment sparked the continued strength of the U.S. tech sector.
RBNZ actions have been effective in lowering rates, Governor Orr says – during the Q&A portion of the event, Governor Orr expressed no concern with the level of the Kiwi Dollar, which seems to have been the catalyst for the Kiwi to move higher.
On top of weakening commodity prices, the shift in broad risk sentiment was likely a negative influence on the Kiwi dollar, sparked by weak economic updates around the globe (e.g., Eurozone Services Business Activity Index: 50.5 in August vs. 54.7 in July, 115,762 U.S. Job Cuts in August, recovery in China’s services sector loses a step).
The Kiwi closed out the week with choppy price action as traders awaited the always anticipated U.S. employment updates. As usual, volatility picked up on the event and traders seemed to lean positive on broad risk sentiment to lift the Kiwi higher a bit after we saw better-than-expected data from the U.S. (U.S. creates 1.4 million jobs in August, unemployment falls to 8.4%)