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NZD Grinds Lower On Coronavirus Worry

FOREX

G10 FX tread water in a lacklustre Asia-Pac session, but the Kiwi's wings were clipped by lingering concern over the resurgence of Covid-19 in New Zealand, as the country reported 13 new cases, including 2 outside of Auckland, where the latest outbreak originated. New Zealand's Cabinet is debating whether to extend lockdown measures when this is being written.

  • The pace of China's economic recovery was somewhat slower than expected, according to a slew of monthly economic indicators for July. The redback was unfazed by the data and firmer up vs. USD.
  • AUD shrugged off a parliamentary testimony from RBA Governor Lowe, as he did not offer much new. Lowe reiterated familiar lines on the Aussie, expressing preference for a weaker exchange rate, while noting that it does not deviate from its fundamental value, which rules out FX intervention.
  • IDR underperformed in Asian EM FX basket, in the lead-up to Indonesia's budget announcement, despite Bank Indonesia's intervention in FX spot interbank market. USD/IDR rallied past Jul 20 peak, printing fresh multi-month highs.
  • MXN briefly knee-jerked lower upon the release of Mexico's daily coronavirus update. The number of confirmed infections in the country eclipsed 500,000.
  • Focus moves to U.S. retail sales, industrial output & preliminary U. of Mich. Survey, flash EZ GDP, final French CPI and a Q&A with Fed's Kaplan.
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com