NZD Weekly Review (Mar. 16 – 20)

NZD Weekly Review (Mar. 16 – 20)

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The New Zealand dollar ends the week as a big net loser as the coronavirus pandemic begins to stress the financial system and raise economic concerns to crisis levels, prompting the Reserve Bank of New Zealand to cut interest rates right at the start of the week.

Overlay of NZD Pairs: 1-Hour Forex Chart
Overlay of NZD Pairs: 1-Hour Forex Chart
NZD Weekly Performance from MarketMilk
NZD Weekly Performance from MarketMilk

New Zealand Headlines and Economic data


  • The RBNZ cuts the OCR by 75 bps in an emergency announcement, next step is a Large Scale Asset Purchase program if more support needed
  • Big risk aversion day as traders priced in the growing probability of a big hit to the global economy by the coronavirus pandemic, now realized after by the latest stimulative actions needed announced by the Bank of Japan, the Federal Reserve and the Reserve Bank of Australia right at the start of the week.


  • New Zealand goes hard with $7.3 billion stimulus to rescue economy amid virus slowdown
  • New Zealand consumer confidence falls to below average levels


  • New Zealand current account deficit narrows to $1.9 billion
  • Dairy prices fall at fourth auction in a row on coronavirus factor
  • It was another big risk aversion day in the financial markets to likely contribute to Kiwi weakness, which actually also saw a break in the usual risk behavior relationships as even bonds and gold fell. This is likely due to the rising concerns of bank liquidity, an extreme demand for U.S. dollars, and the rising probability of a deep global recession.


  • New Zealand economy expanded 0.5% in Q4 2019 as expected
  • The Kiwi found a bottom on the session, likely on a big shift in risk sentiment towards positive during Asia trade. This is likely a reaction to the continued stream of  stimulus actions by global central banks, including a €750bn bond-buying program from the ECB, interest rate cuts and QE from the RBA, and the announcement of a third coronavirus aid package this week from U.S. lawmakers.
  Chart of the Day US500 (S&P500)


  • After a continued risk-on rally during the Asia session to help the Kiwi higher, sentiment turned during the U.S. session likely moving on counter currency news and coronavirus updates, including actions to limit the accelerating number of cases of  coronavirus, and the damage it is doing to financial market liquidity and the economy.
  • In case you missed it, here is a cheat sheet on Who Has Done What for Their Economies Since the Coronavirus Pandemic Hit


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