- NZD/USD awaits further news on the trade war front as markets turn iliquid in Xmas holiday season.
- End of year flows could dominate the price action.
NZD/USD is currently trading at 0.6566 , -0.11%, having traded between 0.6561 and 0.6573. NZD/USD fell from just above 0.6600 to 0.6565 in thin holiday markets overnight and treads water today.
The geopolitical back drop combined with year end flows likely means that there is going to be less fundamentals trading taking place and thin trade.
We can see irrational swings in the market at this time of year and the kiwi is a usual suspect in that respect. On the trade front, the US and China are still in the running for making a deal in principal into a signed contract which is keeping equties elevated. The antipodeans trade as a proxy to the trade news, so there could be some action yet into the end of the year, dependng on the headlines.
GDT price index falls 5.1 percent
Meanwhile, we had the The GDT price index which falls 5.1 percent, with an average selling price of $3,302 per tonne – global dairy trade, as reported by Reuters news. The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade, therefore,the auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product.
Elsewhere, the market’s pricing for RBNZ implies only a 5% chance of easing in February, with a terminal rate of 0.91% (RBNZ OCR currently at 1.0%), according to analysts at Westpac.
NZD/USD levels
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