Daily Currency Update

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Kiwi dollar breaks through 60 US cents

NZD - New Zealand Dollar

The New Zealand dollar closed the week higher when valued against the Greenback reaching a daily high of 0.6061 on the back of broad-based selling pressure surrounding the USD which seems to have provided a boost to the Kiwi currency. The Kiwi dollar continues to press on as the USD comes under pressure from the surge in jobless claims and spike in new coronavirus (Covid19) cases. As New Zealand continues to tackle the coronavirus (Covid19), being in lockdown for at least four weeks, two major banks reported that New Zealand's gross domestic product (GDP) will contract by about six per cent this year as a result of the coronavirus (Covid19) pandemic.

Looking ahead this week on the local data front with the only two releases on Tuesday, Building Consents for the month of February and ANZ Business Confidence. On the data front in the US this week we will start on Monday with Pending Home Sales for the month of February. On Tuesday we will see the release of US Consumer Confidence. Finally on Friday all eyes will be on the US Unemployment Rate decision. From a technical perspective, the NZD/USD pair is currently trading at 0.6019. We continue to expect support to hold on moves approaching 0.6000 while now any upward push will likely meet resistance around 0.6060.

Key Movers

Last week the Greenback posted its biggest weekly decline against a basket of currencies as trillions of dollars’ worth of stimulus efforts by governments and central banks helped temper a rout in global markets driven by the coronavirus (Covid19) pandemic. The U.S. House of Representatives on Friday approved a $2.2 trillion aid package, the largest in American history, to help people and businesses cope with the economic downturn inflicted by the coronavirus outbreak. The United States now has 85,594 people counted as infected, up from 68,211 on Friday. Unemployment claims jumped to a record 3.3 million last week, from 281,000 the previous week and easily ahead of the previous record of 695,000 set in October 1982, only served to fuel market expectations that the Federal Reserve would pump more money into the economy. US Equities were also down 3.5% on Friday ending a three-day rebound for US equities, the first such streak of gains since mid-February.

Expected Ranges

NZD/USD: 0.5800 - 0.6200 ▲

NZD/AUD: 0.9500 – 0.9900 ▲

GBP/NZD: 2.0300 – 2.0700 ▲

NZD/EUR: 0.5200 – 0.5600 ▲

NZD/CAD: 0.8200 – 0.8600 ▲