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The New Zealand dollar had a relatively strong start to 2021, beating out most the rest of the majors. With a extremely light calendar from New Zealand this week, it’s likely the Kiwi was mainly driven by positive broad risk sentiment.

And it’s possible that it moved in correlation with its close trading partner the Aussie dollar, which benefited from positive business sentiment updates.

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:

The Kiwi began its broad move higher late in the Monday session/early Tuesday session.  And with no apparent catalysts from New Zealand on the session, it’s likely this may have been a case of it rolling higher with the Australian dollar, which was lifted by positive business sentiment updates on the session.

Risk sentiment may have also been a driver, leaning positive to start the week, possibly on positive business sentiment updates from around the globe (Korean manufacturing PMI signals sustained expansion at end of 2020, Indian Production and new orders expand further at the end of 2020).

Tuesday:

Global dairy prices rose +3.9% since the last auction on Dec. 15

Thursday:

Global risk sentiment soured a bit during the Wednesday and Thursday sessions, likely a reaction to the disturbing events in Washington, D.C. when the U.S. Capitol was overrun by Trump supporters.

Focus did shift back to positive themes after the U.S. Congress confirmed Biden election, raising the probability even further of more stimulus coming in the U.S., a generally positive risk theme.