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Kiwi edges higher as demand for risk improves

NZD - New Zealand Dollar

The New Zealand dollar followed the AUD higher through trade on Thursday buoyed by an upswing in market demand for risk. Much likes its antipodean counterpart the NZD found support in the PBoC’s stronger than anticipated yuan fixing rate. Having pushed beyond 0.6450 the NZD enjoyed its first daily advance in over a week jumping six tenths of a percent to touch intraday highs at 0.6490 before edging lower into the close and todays open at 0.6476.

Attentions now turn to today’s PBoC fixing price, Chinese inflation data and the ongoing trade war narrative. The inextricable link between the NZD and CNY leaves the Kiwi open to greater downside risks as China allows the currency to follow market forces lower. While some of the early week panic has tempered and demand for risk has improved through the last 24 hours Chinese economic performance and currency value pose a significant headwind for NZD upside.

Key Movers

The trade war has dominated direction and the broader narrative for much of the week, drawing attention away from Brexit developments and European political instability. The pound fell through 1.21 through trade on Thursday after report Johnson would hold general elections in the days after the extended divorce date (October 31) should the UK be forced to leave the with out a firm deal in place. Having touched 1.2095 sterling found support and opens marginally higher at 1.2138. Attentions now turn to q@ GDP data for direction into the weekly close.

The Euro fell through 1.12 on Thursday as concerns surrounding Italian political instability rattled investors and dampened demand for the combined unit. Having failed to form a majority government, swift elections have been called for. Having touched 1.1177 the Euro opens marginally higher this morning buying 1.1186.

Attentions turn to a host of key data sets with Japanese GDP data and Chinas CPI and credit figures dominating the Australasian docket.

Expected Ranges

NZD/USD: 0.6430 - 0.6530 ▲

NZD/EUR: 0.5710 - 0.5850 ▲

GBP/NZD: 1.8610 - 1.8910 ▼

NZD/AUD: 0.9480 - 0.9580 ▼

NZD/CAD: 0.8510 - 0.8615 ▼