The New Zealand dollar nearly takes the top spot this week as traders priced in positive comments from New Zealand government officials, better-than-expected NZ data, and counter currency weakness.
New Zealand Headlines and Economic data
Broad move higher in the Kiwi during the Asia session, likely fueled by the positive updates from China (China’s industrial engine gathers speed, consumers open wallets in boost to recovery) setting off a risk-on lean in the markets for the session.
Fifth time’s the charm – Global Dairy prices lift at auction – prices rose 3.6% since Sept. 1st, the first rise since July 7.
New Zealand economy in deepest recession as second-quarter GDP shrinks – Gross domestic product contracted a seasonally adjusted 12.2% quarter-on-quarter, better than an expected fall of 14% by the Reserve Bank of New Zealand. The Kiwi fell both before and after the event as traders expected the sharpest quarterly contraction on record.
The Kiwi saw support during the Asia session thanks to positive comments from New Zealand’s finance minister, expecting astrong economic rebound from technical recession. The tone changed during the U.S. session as broad risk sentiment shifted negative thanks to a combination of scenarios ranging from a low expectancy of a new stimulus package from the U.S. government, the possibility of the U.K. locking down once again, and as the U.S. tech sector continues to fall.