Home Daily Commentaries Kiwi continues rise on global recovery hopes

Kiwi continues rise on global recovery hopes

Daily Currency Update

The Kiwi jumped to multi week highs on Wednesday as risk appetite continued to improve. NZD/USD continued its weekly ascent to touch highs of 0.6158 on investors hopes that the global economy may be starting to show signs of recovery. The strong moves have inched the pair closer its post-COVID high of 0.6175.
We did hear further commentary from RBNZ governor Orr, who in a Bloomberg interview reiterated the views of his colleagues that although they are prepared to have negative rates, they do not want to go negative at this point.
Looking ahead to todays session, we will hear from RBA governor Lowe and Deputy governor Debelle during Australian trade before a raft of secondary data due out of USA and the Eurozone. Given recent moves, first lines of resistance are now seen approaching 0.6175 before 0.6200 while on the downside, support can be seen at 0.6080.

Key Movers

As we touched on above, safe haven currencies remained under selling pressure overnight as global equity indices rose on improved risk appetite. The greenback fell across the board, losing 0.6% against the EUR, 0.9% against the Australian Dollar and 1.2% against the Kiwi. There was a distinct lack of COVID 19 related news to guide market direction, with the US Federal reserve minutes garnering the most attention from traders.
The minutes from US policymakers touched on more explicit guidance and agreed that cash rates should stay low for a longer period. Most notably, there was no commentary regarding negative rates.
The Sterling was among the worst performers on the day, GBP/USD falling 0.2% to around 1.2220 as UK inflation data fell to its lowest level in three years. The Pound was subsequently under pressure as speculation mounted that the Bank of England could consider negative rates as well as a deeper stimulus response.

Expected Ranges

  • NZD/USD: 0.6080 - 0.6200 ▲
  • NZD/EUR: 0.5560 - 0.5610 ▲
  • AUD/NZD: 1.0710 - 1.0760 ▼
  • NZD/CAD: 0.8480 - 0.8590 ▲