The USD strengthened marginally overnight, leading to a weaker NZD to open the Asia-Pacific session. The Kiwi did have its moments however, touching just below 0.66 throughout most of the day. Opening this morning at 0.6552, the Kiwi is set to enjoy another benign day on the economic calendar.
Direction was mainly attributable to off-shore forces for the New Zealand Dollar with little to drive the Kiwi throughout the day. The Greenback rose, almost by default, as negative news in Europe and Canada conspired to buoy the USD. The Aussie followed a similar pattern, falling against the Greenback to match the Kiwi. For much of the day, the NZD/AUD cross has been trading in a tight range, oscillating between 0.9210 and 0.9240.
The Headlines also added to the NZD’s concerns with reports that Trump is planning to ramp up the tensions between the US and China. Initial reports suggest that Trump is planning to withdraw the US from the Universal Postal Union, implying higher shipping charges for China. Adding to the narrative is the US Treasury Department’s semi-annual currency policy report where the US may label China as a currency manipulator. By the treasury’s own three-point criteria, China is not a currency manipulator, however politics may trump economics in this case.
Moving into Thursday, the Kiwi looks to a quiet day on the calendar. Off-shore headlines and news will again provide direction.