It was a pretty quiet last week for the NZD – which has simply matched the ebbs and flows over the broader global risk environment, points out the research team at ING.
Key Quotes
“RBNZ Governor Orr at Jackson Hole reiterated that the central bank intends to hold policy rates low for an extended period of time (and also didn’t rule out a rate cut if needed).”
“This sentiment is likely to keep a lid on short-term New Zealand rates and the Kiwi dollar. The only small positive for the NZD right now is the speculative markets’ extreme short positioning.”
“New Zealand dairy prices have been slipping in recent months (down more than 12% since the middle of June) – which presents another near-term headwind for the kiwi. This weaker terms-of-trade story may also be seen in the latest trade data – with the country posting its largest trade deficit ($4.44bn) since March 2009.”
“The week ahead sees Aug business confidence data (Thu) – which is worth keeping an eye on given that the RBNZ has cited weak investment intentions as a reason for a more subdued outlook for the New Zealand economy.”
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