Another strong day for the Kiwi on Friday saw the local unit close the week a touch under 0.6880, a level we have not seen since June. The weekly moves represent a 2% gain against the greenback with the currency now sitting up 7% from its early October lows heading into the rest of the year.
Friday’s session saw dovish commentary from Fed Chair Clarida, engendering broad based USD weakness and a downtick in US yields, aiding the NZD and AUD to continue their weekly upward trend. This weakness was compounded by an improvement in global risk sentiment following positive signs emanating out of the US-China Trade dispute, with President Trump expressing optimism regarding a pending deal as well as indicating he may not proceed with his threats to impose additional tariffs on the worlds second largest economy. The outlook for the Kiwi for the remainder of the year will remain sensitive to how these talks develop.
The Kiwi’s gains against the crosses were rather modest. The AUD also closed the week strongly which constrained the NZD/AUD to trading largely flat around the 0.9380 handle. Brexit related GBP weakness also allowed the NZD/GBP cross to reach fresh weekly highs of 0.5360, a 0.2% appreciation on the day.
Today’s calendar is packed with second tier data, firstly NZ performance of service index for October followed by NZ PPI output for Q3. We then move offshore where we have US second tier housing data for November and Fed speak from NY Fed President Williams.