Kiwi Creeps Higher, Gov Orr To Speak Shortly

NZD/USD advanced Thursday as risk appetite held firm, while a spillover from yuan strength supported Antipodean currencies.

• The announcement of a sizable CNY1tn stimulus package in China helped stabilise risk sentiment in Asia. Meanwhile, the PBOC leaned against recent yuan depreciation via a stronger than expected fixing of USD/CNY trading band mid-point.
• From a cross-asset perspective, equity markets were firmer, with U.S. benchmarks grinding higher; the VIX index eased off. However, the aggregate BBG Commodity Index slipped.
• The rate trimmed gains in London hours as the BBDXY index pared earlier losses, but the move was not enough to return the pair to neutral levels.
• NZD/USD last deals at $0.6225, down 6 pips on the day. Bears look for a dip through $0.6157, the 76.4% retracement of the Jul - Aug rally, before targeting Jul 14 low of $0.6061. Conversely, bulls would be pleased by an upswing towards Aug 12 high of $0.6467.
• Fonterra cut its farmgate milk price forecast for this season by 25 cents to NZ$8.50-10.00/kg of milksolids. Its chief executive said the change "will be disappointing for our farmers" but "we believe he longer-term outlook for dairy remains positive."
• ANZ - Roy Morgan Consumer Confidence Index improved to 85.4 this month from 81.9 recorded in July but remains at subdued levels. ANZ flagged that "inflation expectations remain far too high at 5%, but are at least well off their peak."
• Note that RBNZ Gov Orr will speak to Bloomberg from Jackson Hole at the bottom of the hour.