NZD fails to hold on to moves shedding one cent against the USD
Monday 10 August, 2020
Daily Currency UpdateThe New Zealand Dollar enjoyed mixed fortunes on Friday, early in the session it touched a high of 0.6690 before being labelled the worst-performing major for the day and shedding over one cent vs the Greenback. In the absence of any local data the Kiwi had nothing to hold on to therefore, upbeat US Non-Farm Payrolls data which beat expectations pulled the NZD/USD pair down breaking through 66c and touching a low of 0.6588. News that negotiations in the US over the Fiscal stimulus had not been reached and Trump singed four executive orders to provide the country with some relief gave support for the Greenback.
On the data front, the only piece of top tier data is out on Wednesday, the Reserve Bank of New Zealand (RBNZ) announces its interest rate decision. While no change in the overnight cash rate (OCR) is expected, the RBNZ is under increasing pressure to fend off a stronger Kiwi dollar which is placing “further pressure on export earnings.” From a technical perspective, the Kiwi is currently trading at 0.6605, we see 0.6575 as near-term support followed by 0.6525. On the upside, expect to see resistance on moves approaching 0.6645-50.
Key MoversThe US Dollar Index closed the week around two-year lows despite jobs created in the US beat expectations. Non-Farm payrolls rose by 1,763 million beating forecasts of 1.60 million, although the report shows that more jobs were created, the US needs much stronger figures to turn things around. Meanwhile, Saturday, Trump singed four executive orders on COVID-19 relief, which included $400 in weekly enhanced unemployment assistance; student debt repayment relief; a payroll tax holiday; and an exploration of protections from housing evictions.
The EUR/USD settled into the 1.1780 price zone holding onto modest gains in the week and the GBP/USD cross-rate shed its weekly gains to settle around 1.3060 mark. There is some good news to report on, the UK is working on plans to reopen schools in September after their summer holidays and according to latest reports the number of people being treated for COVID-19 in UK hospitals has dropped by 95% from the peak of the outbreak.
- NZD/USD: 0.6525 - 0.6645 ▼
- NZD/EUR: 0.5530 - 0.5680 ▼
- GBP/NZD: 1.9360 - 1.9880 ▼
- NZD/AUD: 0.9175 - 0.9320 ▲
- NZD/CAD: 0.8740 - 0.8920 ▼