Insights 
VT 
New Zealand’s financial markets are closed today, Friday, 20 June 2025. This closure is due to a public holiday, creating a long weekend in New Zealand.
As a result, trading activity in the kiwi dollar is expected to be even more limited than usual. The kiwi dollar is known for thin liquidity, and today will see even less movement.
Impact On Liquidity
With New Zealand markets shut, liquidity in NZD pairs will remain restrained, likely widening bid-ask spreads and dulling the prospect of sharp price swings. From an order flow standpoint, reduced participation often leads to erratic moves when even moderate orders pass through. But this tends not to result in longer-lasting trends—momentum can build on lower volume, only to fade quickly once fuller market participation returns.
We’ve seen this pattern before during regional holidays, especially on Fridays. Investors with exposure typically reduce their footprint or hedge earlier in the week, so by the time the actual closure arrives, most positioning has already been pared back. It makes today less of a trigger for movement itself, and more of a day to monitor for noise.
Meanwhile, derivative traders who model positions across multiple currencies may notice slight inefficiencies in cross rates. The kiwi, tied as it is to broader risk sentiment and commodity flows, can still be influenced by external triggers, especially from US data releases or unexpected headlines. Should any of those occur, the thinner Friday market can exaggerate reactions beyond what’s justified by fundamentals alone.
Thompson anticipated a lull by midweek, flagging a steady decline in volume from Tuesday onwards. That call has played out neatly, and momentum traders have largely taken a back seat. Any price action through Asia today will be mechanical, possibly algorithmically sustained more than directionally driven.
Positioning Shifts
If we look at volatility pricing, short-dated implieds have been marked lower, reflecting the expected calm—but that repricing has mostly finished. For those of us watching gamma exposure, these kinds of sessions are better used for recalibration than initiation, unless hedging must be done for front-end exposure. Anything initiated now has a time decay headwind without the media flow to fuel movement.
Where we have seen some subtle changes is in positioning through the back end of the curve. Gupta noted earlier in the week that interest had returned to mid-August expiry options, possibly reflecting some quiet preparation for upcoming central bank rhetoric. These are minor shifts—but they do suggest option traders are looking further along the horizon, not today for their decision-making.
It’s worth flagging also that interbank dealers have been tightening pricing bands slightly overnight, perhaps in expectation of manual management of currency pairs during the lull. For retail and institutional traders alike, any new positions entered today should be weighed carefully against widened spreads and slippage. Holding off until next liquidity pick-up may make for better fills or outcomes.
In practical terms, the Friday closure reshuffles global FX liquidity patterns across the session. It weighs most during the New Zealand and Australian morning hours, but may spill lightly into the early stages of London trade unless offset by a firm catalyst from other regions. We’ll be keeping an eye on that.
