The New Zealand Dollar has been relatively stable over the past few days, owing to a lack of major global news. Countries around the world are beginning to stabilise their rate of coronavirus infections, after entering various states of lockdown. Spain, which had been one of the latest countries to be hit hard by an outbreak, has finally reported a decreasing rate of new infections per day. In Wuhan, China, the origin of the virus, the number of new infections per day has finally stopped completely after 11 weeks of lockdown.
New Zealand’s efforts to contain the spread of the virus have kept the Kiwi Dollar stable, despite the NZD’s reputation as a riskier currency. New Zealand is currently in its highest level of lockdown, and has been since the 25th of March, where all citizens are required to stay at home except for essential workers. This lockdown is expected to last for a month, although it is uncertain at this stage whether or not the government will consider extending it. However signs at this stage are positive, and it seems that the decision to lock down the country preemptively has paid off. New Zealand’s number of coronavirus cases has also decreased in the last few days, down 4 from yesterday, and 13 the day before.
On the previous session NZD rose to a one week high of 0.5975 against the USD, just below 0.6000. These two day gains were made after comments made by the Reserve Bank of New Zealand, which stated that they were open to increasing Quantitative Easing. In an interview, RBNZ Governor Adrian Orr said that the reserve bank would increase monetary stimulus if needed.
However on the current session it seems that the Kiwi Dollar has been unable to carry its momentum forward, as it is now trading at 0.5958.Therefore, if it breaks past the resistance turned support line at 0.5925, then the next key support level lies at 0.5830.
Another factor influencing the NZD’s current inability to break the 0.60 mark is the fact that the US Dollar’s strength has also continued, with the NFP data of 160,000 lost jobs in March still unable to shake off its momentum.
Moving forward, any new updates that may influence the move of the NZD/USD pair will be announcements made by the New Zealand government regarding the current lockdown and when it may end, as well as any new economic packages to be released.
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