Big hit to the New Zealand dollar this week on both risk sentiment moving further negative on rising pandemic fears, as well as another monetary policy statement from the Reserve Bank of New Zealand signaling a potential move to negative interest rates.
New Zealand Headlines and Economic data
New Zealand central bank holds rates but hints at further easing – this was obviously the catalyst for both the pick up in volatility and negative lean in the Kiwi for the session.
Broad risk sentiment was also on a negative lean to likely add pressure to the Kiwi, sparked another round of U.S. equity selling during the New York trading session as the idea of the U.S. getting additional stimulus continues to remain uncertain ahead of the U.S. elections.
We saw a bounce in the Kiwi during the Asia trading session, and with no drivers from New Zealand on the session, it’s likely the bounce in broad risk sentiment on renewed stimulus hopes was the catalyst for the recovery.