- NZD/USD takes off to blue skies s risk appetite remains firm on hopes of a vaccine.
- Coronavirus divergence between nations is supporting the kiwi also given NZ’s low contagion rates.
NZD/USD is currently trading at 0.6932 between a range of 0.6875 and a 0.6945, upon the day by some 0.6% and printing a fresh daily high.
The bird is correlated to the risk-on sentiment which is seeing the current take-off across the board.
The vaccine headlines are helping to boost risk appetite and has equated to a small lift on Wall Street.
Pfizer Inc PFE and its German partner BioNTech BNTX revealed a 95% success rate at the conclusion of their COVID-19 vaccine trial on Monday.
The news comes on the heels of the headlines on Monday after Moderna Inc MRNA announced a similar rate of success in preliminary data from its vaccine candidate.
However, global new infections have soared to record levels, raising the possibility of increased restrictions as the economy struggles to recover from the recession.
The United States remains the country worst affected by the pandemic and the US dollar is under pressure because of it.
”Globally, the economic gap between countries that have controlled the virus and countries that have not is as wide as ever.
”New Zealand is lucky to find itself in a relatively Covid-free part of the world,” analysts at Westpac explained. ”Long may that last because Asia’s resilient economies have backstopped our agricultural exporters in an otherwise difficult situation.”
”Still, the “big picture” remains messy,” analysts at ANZ bank argued.
”The near term outlook for the virus and countries ravaged by it is dire, but equally there is light at the end of the tunnel.”
The analysts at ANZ argued that ”timing is everything”.
”But countries like NZ that have the diseases under control are in a better position to bridge that gap, and with the surging housing market scaring off expectations of a negative OCR, the path of least resistance for the NZD is higher.”
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