The New Zealand dollar rallied into close on Friday, bouncing off weekly lows and pushing back through 0.68 U.S Cents. Risk on trade bolstered demand for the commodity led unit retracing losses suffered in the wake of comments from RBNZ Deputy Governor Geoffrey Bascand. Bascand proposed increasing banks capital requirements, a move that would push lenders to increase domestic borrowing costs, and in turn force the RBNZ to cut official interest rates to ensure the tightening financial conditions don’t force the broader economy to undershoot inflation and growth targets.
Having touched 0.6768 the Kiwi rallied in a risk on environment as US-China trade hostilities appeared to ease, as president’s Xi Jinping and Trump claimed talks were progressing well and an extension in the Tariff détente may be extended beyond this Friday. Easing tensions and the promise of a return to traditional trade relations have emboldened markets appetite for risk and heightened hopes for an uptick in global growth.
Attentions today turn to retail sales data today, while trade balance and Business confidence headline Wednesday and Thursday’s dockets. Watch supports at 0.6750 and upside resistance on moves above 0.6930.