New Zealand dollar is getting a boost today, heading a little bit higher after yesterday’s drop. Kiwi is seeing some support, but more weakness could be ahead.
Yesterday, disappointing growth data from China led to the wholesale dumping of risk assets, including commodity currencies like the New Zealand dollar. Today, as gold prices attempt to rise back toward the $1,400 level, and there is a little more demand for risk assets, kiwi is gaining ground.
Kiwi’s biggest bounce today, after seeing to its largest single-day loss since November 2011, is against the Japanese yen. Often, the New Zealand dollar sees dramatic movement against the yen.
For now, there is some help for the kiwi from domestic exporters, as well as talk of sovereign investors. New Zealand dollar looks like an interesting trade for some. There is also some support as buyers look to take advantage of yesterday’s dip.
What happens next will depend, in large part, on how Forex traders read economic news, and whether it appears that risk appetite is returning.
At 15:15 GMT NZD/JPY is up to 82.9385, still lower than the five-year high set last week. This is up from the open at 81.3450. NZD/USD is up to 0.8477 from the open at 0.8405. GBP/NZD is down to 1.8042 from the open at 1.8180. EUR/NZD is down to 1.5484 from the open at 1.5507.
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