Daily Currency Update
NZD - New Zealand DollarThe New Zealand dollar opens this morning little changed from Tuesday’s open having enjoyed a tumultuous upward run overnight. The NZD pushed through 0.59 US cents, touching intraday highs at 0.5903 as risk sentiment enjoyed another boost in the wake of US lawmaker’s decision to push through a $2 trillion stimulus package. Having bounced off lows near 0.55 through the back half of last week the NZD has enjoyed strong gains as investors respond to the global effort to prop up both respective domestic economies and the global economy in a bid to avoid a crushing world wide recession. Risk demand advanced for a second consecutive day Wednesday and while the NZD corrected lower into this mornings open as profit taking took hold, there is scope for the Kiwi to continue the current path of recovery. Investors are reversing the overshoot of the past fortnight as liquidity becomes more readily available and central banks inject funding at record levels. The NZD is still vulnerable to broader risk off swings as volatility remains elevated and the coronavirus continues its relentless march across the globe. Watch short term resistance on moves approaching 0.59/0.5950 with supports in tact for now, on moves approaching last weeks low.
Key Movers
The US dollar index fell for a second consecutive session as risk sentiment improved following US lawmakers announcement of a $2 trillion dollar stimulus package. Equities and stocks surged while commodity led and emerging market currencies jumped higher as demand for safe haven assets eased and investors confidence grew in the wake of stimulus plan. While the specifics of the plan are yet to be released as the bill is set to be rushed through the House and Senate in the latter half of the week we expect it will target key industries devastated by the coronavirus, while propping up the labour market and cushioning the blow of the looming recession with cheques for most Americans. The dollar index fell 0.81% to 101.87, led by gains in key counterparts. Sterling’s upturn continued pushing through 1.19 while the Euro advanced 1%, testing 1.09. The single currency found added support following Germany’s decision to remove its debt break, freeing Chancellor Merkel to deliver record stimulus. Germany’s economy was already faltering prior to the crisis and estimates suggest 20% could be wiped off Europe’s engine room in the wake of the coronavirus. As confidence across Europe tumbles stimulus measures are a welcome reprieve and may lend the Euro some short term support.Attentions remain squarely affixed to the evolving coronavirus pandemic and while we have seen a correction in USD through the last two days, we expect the world's base currency will remain will bid in the face of ongoing uncertainty.
Expected Ranges
- NZD/USD: 0.5910 - 0.5480 ▲
- NZD/EUR: 0.5240 - 0.5520 ▼
- GBP/NZD: 1.9950 - 2.0790 ▲
- NZD/AUD: 0.9780 - 0.9970 ▲
- NZD/CAD: 0.8090 - 0.8450 ▼