Kiwi opens at lowest point since 2009 after RBNZ cut rates by 0.75
Monday 16 March, 2020
Daily Currency UpdateNZD - New Zealand DollarThe New Zealand Dollar suffered another eye-watering day of volatility on Friday with the Kiwi hitting its lowest level since 2009. Opening this morning at 0.6139, the Kiwi again found itself wantonly sold-off on the back of a resurgent Greenback and an emergency rate cut by the RBNZ of 0.75 to take the cash rate to a new low of 0.25.The Kiwi fell significantly during the American session on Friday as the Greenback rallied after President Trump appeared to be more assertive in the US reaction to COVID-19. President Trump announced a national state of emergency as well as a number of measures to support the economy. Markets immediately reacted to the news with the S&P500 rallying and bond markets also jumping. Adding to the strengthening US Dollar was a liquidity squeeze on the Greenback. Ultimately the US Dollar Index rose an impressive 3.3% for the week as the Greenback again became a source of safety for the market. Unfortunately for the Kiwi however, a currency with close ties to China was not the first option for investors on Friday. Closer to home, Prime Minister Ardern announced an effective travel ban as did Australia which will ultimately have an effect on the ailing tourism industry in both countries. The RBNZ also took the drastic measure to cut interest rates to a fresh low of 0.25, a move that took the Kiwi below 0.62 for the first time in 21 years.Moving into a new week, global markets continue to be volatile with emergency central bank meetings and the escalating COVID-19 pandemic taking center stage this week.
Key MoversThe COVID-19 Pandemic continues to roil global markets with significant swings in all financial markets. From a foreign exchange perspective, nearly all currencies oscillated throughout last week. Adding fuel to the fire was a number of emergency central bank cuts with the US Fed dropping the interest rate to 0 and RBNZ dropping theirs to 0.25. The Bank of Canada and Norse Bank also dropped their rate in emergency meetings by 0.5. In terms of the largest moves in foreign exchange, both Canada and Norway benefitted from the bounce back in Oil prices with sharp rises on Friday while the Japanese Yen continues to struggle and posted a 3.3% decline.
- NZD/AUD: 0.9685 - 0.9875 ▲
- NZD/CAD: 0.8290 - 0.8485 ▼
- NZD/EUR: 0.5345 - 0.5549 ▼
- GBP/NZD: 2.0155 - 2.0467 ▼
- NZD/USD: 0.6005 - 0.6210 ▼