All hail king (kiwi) dollar
The New Zealand dollar is up more today than it lost in the entire month of October, which was a brutal month for risk assets.
The kiwi has been steadily and relentlessly climbing since midway through Asia-Pacific trading and is now up a whopping 140 pips, or 2.2%, to 0.6657.
The rally stomped out the downward sloping trendline since mid-June and blew past the mid-October high. It's now approaching the 100-day moving average, a level it hasn't traded above since April.
What's incredible is that this doesn't come any particularly good domestic news. In mid-October the CPI showed some life at 1.9% y/y compared to 1.7% expected but very few people expect any hikes from the RBNZ for the foressable future. September trade balance was also larger than expected at 1560m versus 1360m expected.
However it might have been trade that was a trigger, only it was Australian trade. Today's move in both currencies kicked off after September's Australian trade surplus was A$3017m compared to A$1700 expected.
Mechanically, that's good for GDP but it might also be showing that the trade war is working in mysterious ways. If it turns out that China is turning towards Australia, New Zealand or anywhere else for more goods and buying less from the US (or if the US is doing the same), that place could be the bigger winner in the trade war.
