The Dollar weakened over 1% in trade-weighted terms last week, to the low end of a range in place since mid-March and global equities made only incremental gains.
The New Zealand Dollar was the outperformer, gaining 1% albeit from an 8-week low. There are signs that domestic economic activity has been picking up slowly since Prime Minister Ardern moved the lockdown alert Level to 2 on 13th May – it was on at Level 4 until 27th April. The number of new covid-19 cases has been minimal in the past month and there have been no deaths in recent weeks, with the country arguably one of the first to be able to claim that it is on the verge of eradicating the virus.
The Euro, Sterling and Australian Dollar were broadly unchanged. UK macro data, including labour market figures, CPI-inflation, retail sales and Composite PMI were all very weak in absolute terms and point to a potentially record contraction in GDP in Q2. But on the whole the figures were broadly in line with expectations, providing markets with little direction.
