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COVID-19 restrictions weigh on NZD

NZD - New Zealand Dollar

The New Zealand Dollar fell through trade on Thursday, as further community transmitted cases of COVID-19 heightened concerns stricter lockdown protocol will be extended. Thirteen new cases were recorded yesterday, a worrying sign for health officials still struggling to identify the source of the outbreak. Having tested 0.66 the NZD slid steadily throughout the day drifting below .6550 to touch intraday lows at 0.6535. While support appear to form on moves approaching 0.6530 investors appeared reluctant in extending upside ahead of Government updates today regarding the length of the current Auckland lockdown. An extension of social distancing protocol will likely weigh on the NZD and could see the currency test a break back below 0.65 in coming days.

Key Movers

The USD fell through trade on Thursday, forced lower against a basket of major counterparts as Fiscal Stimulus negotiations remain at an impasse. It appears relief packages for the US Postal Service designed to shore up election infrastructure has emerged as a primary sticking point, the Democrats are desperate to sure up mail in voting avenues, a crucial source of votes in the Upcoming November election, while Trump has promised to block any funding that might facilitate mail in voting. As Democrats and Republicans squabble over partisan differences there is a growing concern the stalemate will add increasing pressure on consumption patterns and force the US into an even deeper recession. The Euro tested 1.18 while the Pound pushed back above 1.3050 amid rising hopes for a post Brexit trade deal. Comments from EU leaders, lead by the Irish Prime Minister suggest there is a “common landing zone” for trade negotiations. Despite shrinking by a record 20.4% in the three months to June 30 Sterling remains buoyed by broader USD weakness.

Attentions today remain with US lawmakers as markets seek any sign a deal can be struck and government relief issued.

Expected Ranges

NZD/USD: 0.6480 - 0.6620 ▲

NZD/EUR: 0.5480 - 0.5590 ▼

GBP/NZD: 1.9620 - 2.0120 ▲

NZD/AUD: 0.9110 - 0.9240 ▼

NZD/CAD: 0.8580 - 0.8730 ▼