- Access Our As The Fed Appears Cornered Regarding Effective Monetary Policy
The week ended on a sour note for high-yielding currencies like Emerging Markets & the New Zealand Dollar. Mid-Week, the New Zealand Dollar got a nice bump thanks to stronger China Data. The Chinese data was enough to push to a 2016 high of 0.7488. However, the end of the week led to a
relatively strong sell-off in risk assets, and NZDUSD ended the week closer to 0.7300.
The data docket was nearly mute in NZ last week aside from a positive milk auction that attributed to the early week rise. The GDT index was up 7.7%, and the benchmark whole milk powder was up 3.7%. Next week will provide growth and inflation readings components that could allow NZD volatility to rise. Monday will provide MoM Food Prices, which is in focus given New Zealand’s commodity focused economy, and Thursday will provide BusinessNZ Manufacturing PMI and GDP readings.
The New Zealand Dollar could continue to hold up relatively well even in a possible risk-off environment. For this to take place, the data needs to hold up well and next week should allow us to see whether the NZD outpaces other high-yielders.
Data source: , Chart Source: Python. Prepared by DailyFX Team
The ratio of long to short positions in the NZDUSD stands at -1.97 as 34% of traders are long. Yesterday the ratio was -3.37; 23% of open positions were long. Long positions are 26.2% higher than yesterday and 9.2% above levels seen last week. Short positions are 26.2% lower than yesterday and 1.9% below levels seen last week. Open interest is 14.2% lower than yesterday and 0.4% below its monthly average.
. The trading crowd has grown less net-short from yesterday and last week. The combination of current sentiment and recent changes gives a further mixed trading bias.