Daily Currency Update
NZD - New Zealand DollarThe New Zealand Dollar rallied through trade on Tuesday, building on Monday’s upturn and testing 0.60 US cents. Sustained improvements in demand for risk coupled with a positive spillover from RBA commentary and an uptick in dairy prices helped build demand for the NZD. Risk sentiment improvements continued as Spain and Italy, two countries the hardest hit by the coronavirus pandemic, reported declining fatality rates through the last few days. The Reserve Bank of Australia announced it will continue to monitor the pace of bond purchases and committed to reducing the size and frequency of its QE program should financial conditions improve. The comments pushed Australian bond yields higher, spilling over to NZ rates and adding increased demand for NZD in the risk on environment. Having touched intraday highs at 0.6015 the NZD edged lower into this mornings open and currently buys 0.5974 US cents. Attentions remain squarely affixed to evolving coronavirus headlines and fluctuations in risk demand with resistance forming on moves above 0.60/0.6020.
Key Movers
The US Dollar fell through trade on Tuesday, succumbing to improving demand for risk and signs the fight against the coronavirus is finally beginning to shift. Spain, Italy and the UK, three of the hardest hit European countries all reported declining infection and fatality rates while New York governor Andrew Cuomo announced they are nearing the peak of the curve. The dollar index fell 0.8%, moving back below 100 to touch 99.92 when valued against a basket of currencies. The Euro pushed through 1.09 while the pound moved back through 1.23, testing another break above 1.24 despite uncertainties surrounding Boris Johnson’s conditions and the stability of government in his absence. Johnson spent a second night in intensive care after his condition worsened at the weekend, calling in Dominic Raab to deputise as he battles the virus. Attentions remain affixed to signs of improvement in the fight against coronavirus with the USD underpinned by the sustained uncertainty. We expect investors to remain wary of extending risk plays in the face of the ongoing coronavirus lockdown with demand for risk largely subdued through the weeks ahead.
Expected Ranges
- NZD/USD: 0.5880 - 0.6020 ▲
- NZD/EUR: 0.5380 - 0.5550 ▼
- GBP/NZD: 2.0180 - 2.0720 ▼
- NZD/AUD: 0.9630 - 0.9820 ▼
- NZD/CAD: 0.8310 - 0.8450 ▼