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  • NZD/USD reverses lower from the 5-day average resistance. 
  • New Zealand’s Treasury sees the virus outbreak having a prolonged negative impact on the economy.

The selling interest around the New Zealand dollar seems to have strengthened with the nation’s Treasury warning of a prolonged negative impact of coronavirus pandemic on the domestic economy. 

Rejected at 5-day MA

The pair faced rejection at the descending 5-day average at 0.6271 about two hours ago and is currently trading near 0.6250, representing a 0.14% drop on the day. 

New Zealand Treasury’s monthly report said the global spread of the virus is increasing the risks of a substantial negative impact that may persist for several quarters. 

While the Domestic data from January signaled a pickup in momentum with business sentiment indicators showing large gains, the virus outbreak is weighing on the outlook, the report added. 

The dip, however, could be reversed as the risk sentiment seems to have stabilized. The futures on the S&P 500 are reporting a 0.40% gain at press time. The index rallied by over 4.6 percent on Monday on hopes fora coordinated rate cuts by major central banks. 

Technical levels