NZD/USD recovers to 0.6130 but failed to hold above 0.6100
- Kiwi of lows versus US dollar but still under pressure.
- AUD/NZD hits five-year lows, near the parity level despite RBNZ rate cut.
The NZD/USD pair dropped to test daily lows and rebounded, rising to 0.6131. As of writing, was trading at 0.6090, modestly higher compared to Friday’s close.
On a volatile day, the pair turned positive for the day, after falling earlier to 0.5971, the weakest since 2009. At the opening on Monday, the Reserve Bank of New Zealand and other central bank took decisive action in order to limit the economic impact of the coronavirus.
RBNZ cut the key rate to 0.25% and the Federal Reserve to 0.0-0.25%. The announcements failed to bring confidence to financial markets but the declines of NZD, AUD and CAD were limited even as Wall Street tumbled.
The Dow Jones was falling 8.50% and the Nasdaq 8.30%. Markets continued to be on panic mode as entire countries shut down to prevent the spread of the coronavirus. US yields opened sharply lower after the rate cut but over the last hours turned to the upside, adding some strength to the greenback. The US 10-year yield peaked at 0.85% before pulling back to 0.77%.
The kiwi was also higher versus the Australian dollar. AUD/NZD tumbled toward the parity levels. It bottomed at 1.0018, the lowest in five years, as analysts see more action from the Reserve Bank of Australia. “We expect the RBA to cut the cash rate to 0.25%, for it to initiate QE and announce further policy measures to support the Australian economy all on Thursday”, said TDS analysts.
NZD/USD Technical levels