NZD Back Down After Two Day Streak of Gains

NZD Back Down After Two Day Streak of Gains

The New Zealand Dollar (NZD) has seen a dip after a two-day streak of gains, largely due to a lack of significant global news. With many countries around the world beginning to stabilize their coronavirus outbreaks after imposing lockdowns, there have been positive signs in key regions. Spain, one of the hardest-hit countries, is reporting a decrease in new infections, and Wuhan, China, has seen its daily infection rate drop to zero after 11 weeks of lockdown.

New Zealand’s strict measures to combat the virus have kept the Kiwi Dollar relatively stable, despite its reputation as a riskier currency. The country entered its highest level of lockdown on March 25, with citizens required to stay at home, except for essential workers. The lockdown is expected to last for a month, although an extension is still uncertain. Early signs suggest that New Zealand’s preemptive lockdown decision has paid off, as the number of coronavirus cases has decreased in recent days, with just four new cases reported compared to 13 the day before.

During the previous session, the NZD rose to a one-week high of 0.5975 against the US Dollar, approaching the 0.6000 mark. These gains followed comments from the Reserve Bank of New Zealand (RBNZ) suggesting that they are open to increasing Quantitative Easing if necessary. RBNZ Governor Adrian Orr mentioned that the central bank would consider more monetary stimulus in response to the economic crisis.

However, the NZD has struggled to maintain momentum, and is now trading at 0.5958. If it falls below the support line at 0.5925, the next key support level is at 0.5830.

The NZD’s inability to break the 0.60 level is also partly due to the continued strength of the US Dollar. Despite the loss of 160,000 jobs in March, as reported by the latest Non-Farm Payroll (NFP) data, the US Dollar remains resilient.

Looking ahead, the direction of the NZD/USD pair will likely depend on updates from the New Zealand government regarding the lockdown’s duration and any new economic relief packages that may be announced.