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Kiwi dollar gains on overnight risk sentiment

NZD - New Zealand Dollar

The New Zealand dollar has opened weaker this morning against the Greenback trading around the 0.7150 level. Overnight we saw the Kiwi dollar reach a high of 0.7183 on the back of lower US Treasury yields which helped boost the risk sentiment, sending US equities higher, led by the tech sector. On the news front yesterday disappointment was shared in the government’s announcement on no change to current border restrictions. New Zealand Prime Minister Jacinda Ardern says her country is not yet ready to open a travel bubble with Australia, even though the Australian government has lifted travel restrictions to New Zealand they needed to “proceed with caution”.

On the data front today its fairly quiet in New Zealand with the only release Credit Card Spending y/y. However all eyes this week will be on Wednesday’s monthly Trade Balance release which is forecast for a boost 180M vs. the previous month -626M. From a technical perspective, the NZD/USD pair is currently trading at 0.7146. We continue to expect support to hold on moves approaching 0.7130 while now any upward push will likely meet resistance around 0.7190.

Key Movers

On Monday the Greenback extended its decline during the US afternoon, as US Treasury yields eased, with that on the 10-year note bottoming at 1.66% and settling nearby. A lower rates backdrop has boosted US equities, with the S&P500 currently up 0.8% and the more rates-sensitive Nasdaq index up over 1½% as the IT sector leads the way.

AstraZeneca reported overnight that an advanced trial data from a US study reported that its COVID19 vaccine was shown to be safe and 79% effective. The vaccine was 80% effective in participants aged 65 and over and 100% effective in preventing serious illness and hospitalisation across ages and ethnicities. Although AstraZeneca's vaccine has been authorised in more than 50 countries, including Australia, it has not yet been given the green light in the US. The data paves the way for FDA approval in the US and should boost confidence and clear up some of the confusion about just how well the shots work.

Expected Ranges

NZD/USD: 0.7100 - 0.7190 ▼

AUD/NZD: 0.9220 - 0.9300 ▼

GBP/NZD: 1.9220 - 1.9440 ▼

NZD/EUR: 0.6000 - 0.6060 ▲

NZD/CAD: 0.8900 - 0.9000 ▼