The New Zealand Dollar ended the week lower on net, but with some pretty large intra-day volatility which was never fully explained by the incoming economic data. NZD/USD began at 0.6880 and ended at 0.6837 but it jumped around from top to bottom of each day’s performance tables in what at times looked quite a random fashion. After Monday’s tumble to USD0.6840, the NZD then jumped to 0.6902 on Tuesday and on to a high for the week on Wednesday of 0.6907. Economic data on job vacancies, construction work done, and wholesale trade were all pretty good but Thursday saw the NZD down to USD0.6824 and it recovered only marginally into the close on Friday evening after the performance of manufacturing survey was published.
According to the Financial Times, the NZ government will this week publish legislation to ban foreigners from buying existing homes; what the newspaper describes as, “the first plank in a suite of policies designed to tackle a chronic shortage of affordable homes that has sparked a homeless crisis”. Quoting Grant Robertson, New Zealand’s minister for finance, as saying, “The market for housing in New Zealand is completely broken,” it cites a recent report by Yale University which concluded the country is suffering the highest rate of homelessness in the developed world with 40,000 people, nearly 1 per cent of the population, living on the streets or in emergency housing or substandard shelters.
If the very real concerns about housing availability and unaffordability are spun into an anti-foreign capital message, then it would be reasonable to expect the NZD to remain somewhat pressured this coming week also.