Kiwi under renewed selling pressure last week falling three percent
Daily Currency UpdateLast week saw further volatility for the New Zealand dollar albeit at its lowest levels in three weeks, closing 1% lower for the day at 0.5857. The New Zealand dollar ranged between 0.5843 and 0.6043, dropping 3% from weekly highs as coronavirus concerns shifted focus to large numbers in the United States where military personnel has been deployed to New York City on the weekend.
As New Zealand enters another week of lockdown since it was entered into at midnight March 26th, it is possible government will announce further measures for level four lockdowns longer than the current four weeks to flatten the current curve of cases. Direction for the local currency is likely to be focused on a number of employment figures out of North America this week.
The New Zealand dollar opens this morning at 0.5865 ahead of the release of ANZ Commodity price m/m. We expect support levels to hold on moves approaching 0.5780, while any upward push will likely meet resistance at 0.5960.
Key MoversTraditional safe haven moves were in play on Friday as risk sentiment continued to wane with coronavirus cases continuing to climb. The US Dollar index was 0.6% higher which is measured against a basket of currencies, seeing highs of 100.80 and disregarded poor non-farm payroll figures.
The non-farm payroll print showed an appalling reading of 700,000 lost jobs last month, a worrying sign for the US economy with economist’s surveys expecting a drop of 100,000. The official employment figure increased to 4.4% up from 3.5% in the previous month. Jobless claims this week are expected to be large again with expectations of another 5 million citizens filing for unemployment in the United States this week.
The EUR/USD saw more large swings down and finished at 1.0800, down nearly 2.9% for the week as uncertainty for further stimulus within the Eurozone weakened the single unit. A raft of services PMI figures in the Eurozone were released on Friday and saw large drops in business activity as expected. Hopes for an agreement for the so called “coronabonds” will potentially be decided this week.
OPEC meetings that were scheduled to go ahead this week are likely to be delayed till next week as rifts continue between Russia and Saudi Arabia. The Stability of oil prices will be a major talking point as prices at the bowser in the United States hit 18-year lows with demand for petrol diminishing and supply yet to be cut.
A focus on macroeconomic data releases look to be eagerly watched upon as investors digest the impact of virus cases and lockdowns by governments. Safe haven plays expect to remain in play as COVID-19 spreads throughout the world and into a global recession.
- NZD/USD: 0.5780 - 0.5960 ▼
- NZD/AUD: 0.9680 - 0.9820 ▼
- GBP/NZD: 2.0500 - 2.1050 ▲
- NZD/EUR: 0.5380 - 0.5480 ▼
- NZD/CAD: 0.8280 - 0.8420 ▼