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NZD trades in a tight range bouncing off low-0.6800's

NZD - New Zealand Dollar

The New Zealand dollar, another currency which benefited last week on the back of news that Pfizer and BioNtech’s stage 3 trials suggested their vaccine would be 90% effective saw the NZD/USD pair touch 20-months highs of 0.6914. Unfortunately the pair wasn’t able to hold on to these gains as the euphoria surrounding the encouraging vaccine news earlier this week may be premature, which saw commodity and emerging currencies, equities and stocks all underperform pulling the Kiwi along. Opening on Friday at 0.6845, the NZD/USD pair seesawed through the trading session between lows of 0.6810 and highs of 0.6848.

Looking ahead, today sees the release of Retail Sales, Wednesday is the RBNZ Financial Stability Report and then Trade Balance and ANZ Business Confidence on Thursday. With new community cases being reported in Auckland, it could potentially signal a new lock down which would be negative for the Kiwi. The NZD/USD opens this morning at 0.6815 with support sitting around 0.6800 followed by 0.6790. On the upside, resistance sits at 0.6900 and 0.6940.

Key Movers

The US Dollar Index, which measures the strength of the Greenback against a basket of six major currencies, slipped on Friday closing at 92.1 as the enthusiasm for a possible COVID-19 vaccine was overridden by the second wave of the virus in the US and Europe. Some US states have once again imposed limits on businesses and everyday life, while the UK, Germany and France are in national lockdowns. On the data front, the preliminary estimate of the US November Michigan Consumer Sentiment Index dropped to 77, below the estimate of 82. Consumers judged future economic prospects less favourably, while their assessments of current economic conditions remained largely unchanged.

Over in Europe, the EUR/USD pair closed the day higher around 1.1834 and the GBP/USD cross put in a strong performance into the weekend close finishing just below the psychological 1.3200. News that UK PM Johnson’s advisor Cummings had resigned early pushed the sterling, which improves the chances that the EU and UK will be able to agree on a free trade deal to replace the current arrangement at the end of the year. However, the UK government released a statement saying that Cummings would continue working for the UK PM until mid-December.

Expected Ranges

NZD/USD: 0.6790 - 0.6880 ▲

NZD/EUR: 0.5720 - 0.5820 ▼

GBP/NZD: 1.9100 - 1.9400 ▲

NZD/AUD: 0.9360 - 0.9490 ▲

NZD/CAD: 0.8940 - 0.9050 ▲