Kiwi gives up recent gains as the coronavirus spreads at an increased pace
Friday 14 February, 2020
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand dollar closed lower on the day spiking downward as concerns surrounding the coronavirus were again amplified after an uptick in the number of reported cases. Having enjoyed strong gains in the wake of the RBN policy announcement on Wednesday the NZD corrected lower touching intraday lows at 0.6429 throughout the Australasian session before tracking sideways and bouncing between intraday highs at 0.6468 and 0.6440.Broader direction continues to be governed by fluctuations in risk appetite driven by reactions in the battle against the coronavirus. While Manufacturing PMI dominates the domestic docket, daily developments in the fight against CoVID will drive investor decision making into the weekly close. We expect the NZD to remain largely range bound and watch supports at 0.6380 and resistance on moves approaching 0.6470.
Key MoversThe Euro tracked lower through trade on Thursday touching fresh multi-year lows at 1.0834 as market demand for risk faded and investors looked to short the combined currency. A string of soft macroeconomic data sets and a clouded or bleak growth outlook have prompted markets to short the Euro and chase a higher yield return. The Great British pound was the days big mover, jumping after the resignation of finance minister Sajid Javid. Markets speculated that the new chancellor of the exchequer, Rishi Sunak, will drive fiscal expansion, lower capital gains taxes, issue tax cuts and increase investment infrastructure spending. Sterling rallied back through 1.30 to touch 1.3068. Attentions today turn to US retail sales data as the headline item on the macroeconomic docket.
- NZD/USD: 0.6380 - 0.6470 ▼
- NZD/EUR: 0.5920 - 0.5960 ▲
- GBP/NZD: 1.9980 - 2.0530 ▲
- NZD/AUD: 0.9530 - 0.9630 ▼
- NZD/CAD: 0.8490 - 0.8570 ▼