We wrote in our North American opening comment on Thursday that, “international investors selling the NZD feel they’re pushing on an open door”. Looking at the price action overnight, it seems that it opened on to a pretty steep staircase.
From a best level of 0.6880 early in the session, NZD/USD has tumbled to 0.6830; a fresh low for 2017. GBP/NZD, meantime, has jumped more than a cent overnight to an 18-month high just short of 1.94. This move lower in the Kiwi hasn’t been driven by news flow, but an increasingly ugly technical picture.
NZD/USD is now stuck firmly below its 20, 50, 100 and 200 day moving averages, it has taken out (marginally) the May and October lows and approaches a point in the week when liquidity conditions are at their least favourable.
New Zealand released overnight its Quarterly International Visitor Survey. It noted visitor spending rose 4% y/y to a record NZ$10.4bn in the year to September. This was driven by an increase in visitor numbers, whereas the average spend per visitor fell 4%.
The Ministry for Business, Innovation and Employment (MBIE) which releases the report noted the strong NZD had contributed to a decline in spend per visitor. If the exchange rate moves of the last few weeks continue, there should be some much happier faces in the Ministry and tourist industry…