Weighed On By Risk Aversion

NZD/USD started Wednesday on a firmer footing, before a retreat in risk appetite knocked the rate into negative territory in European/U.S. hours. Sentiment surrounding U.S. fiscal talks soured again, with familiar sticking points still unresolved, while crunch Brexit talks remained a major nail-biter.

• Yesterday's appearance of RBNZ Gov Orr before the Finance and Expenditure Select Committee got little broader airing. The official reminded that the Reserve Bank may not need to use the full amount of its LSAP programme permitted by the FinMin's indemnity. Orr noted that "we want to make sure the potential is there to be able to manage all possible outcomes" and "we can tailor the amount of monetary stimulus based on the situation."
• Recovery in New Zealand's card spending lost steam in Nov, rising just 0.1% M/M. Elsewhere, ANZ Truckometer Heavy Index edged 0.3% M/M lower.
• NZ Commerce & Consumer Affairs Min Clark said that the gov't wants to implement regulations to reduce merchant service fees on debit and credit cards, in the form of hard caps targeted for specific classes of retailers.
• We're off to a cautious start in Asia, with NZD/USD extending losses to $0.7014 (7 pips worse off on the day). The rate has now virtually erased this month's gains. A fall through Dec 7 low/round figure of $0.7006/00 would open up Nov 23 low of $0.6897. On the flip side, gains past Dec 3 high of $0.7104 would draw attention to the upper 2.0% Bollinger Band at $0.7121.
• Remaining data releases of interest this week include food price index & BusinessNZ M'fing PMI, due tomorrow.