The New Zealand Dollar made a jump at 4am GMT today, during a press conference where New Zealand Prime Minister Jacinda Ardern announced that the country would be ending its Level 4 lockdown at the end of Monday 27th April, one week from now. New Zealand will move back down to Level 3 of its alert phase.
Immediately after the announcement was made, the NZD rose by almost 0.6% to a high of 0.6058 to the US Dollar. The Kiwi Dollar had been picking up momentum over the past week, boosted by positive data surrounding the number of daily COVID-19 cases, and this announcement is sure to extend that momentum further.
Since the 15th the number of daily new cases of coronavirus in the country has been consistently under 20, leading investors to become more optimistic that the lockdown would end soon and businesses could open again.
However life under level 3 is still mostly similar to that of Level 4, only with less restrictions surrounding essential businesses. Employees are still being asked to work from home if possible, and retail businesses and restaurants can only open if they can provide non contact methods of purchasing such as online shopping or takeaways. Therefore, this move seems to have been made to minimise the risk of a potential outbreak as well as how widespread it would be, while giving citizens a reprieve from the strict lockdown rules of the past month, and allowing the economy to begin recovering in some capacity, even if it's limited.
In other news WTI crude oil dropped below $15 a barrel today, a drop of 8%, and is continuing its freefall. These prices for oil are now the lowest since 1999. As outlined in my article last week, oil is suffering heavily from a lack of global demand, as oil consumption has gone down 30% just in the last month alone, and it seems that the deal reached between OPEC and Russia to pull back production has been unable to correct oil prices. This deal will also not come into effect until May, which is most likely why oil did not see any movements to the upside after the announcement.
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