The weaker US dollar is a boon for the kiwi, not that a boon is what is being sought right now. The RBNZ for one would like the currency lower.
The NZD has been an underperformer over past weeks, but it has shaken that off so far this week to get back to 0.66.
The NZ government has shown itself to be intolerant of any bad COVID-19 news, imposing restrictions across the country. This is not a positive for economic growth (in the short term at least) but the NZD has shrugged ti off.
The RBNZ last week committed themselves to driving rates lower, and all bar confirmed a negative cash rate was on the way, as is more easing via securities purchases. Again, NZD shrugged it off.
Overnight, the dairy auction saw prices of this largest of NZ exports fall again. The price index is down more than 7% since early last month. NZD … higher overnight.
As we've been saying for past weeks and months, local factors are taking a back seat to global factors, a key driver is the weak USD. That backdrop looks in play for a while to come.
