Home NZD/USD hits one-week lows under 0.6450 as S&P 500 tumbles
FXStreet News

NZD/USD hits one-week lows under 0.6450 as S&P 500 tumbles

  • Commodity and emerging market currencies drop sharply, particularly versus JPY and CHF.
  • NZD/USD having the worst day in at least a month.

The NZD/USD pair dropped further and bottomed at 0.6439, reaching the lowest level since June 4. On Wednesday, the kiwi peaked at 0.6583, the strongest since January but then it started to correct lower, accelerating on Thursday amid risk aversion.

As of writing, the decline in US stocks is gaining speed. The S&P 500 is falling 4.70% and the Dow Jones 5.50%, trading at the lowest in ten days. The VIX (CBOE Volatility Index) soars 30%, to the highest since May.

After a sharp rally, equity prices reversed on Tuesday and accelerated lower on Thursday. Analysts point out recent economic forecasts and new coronavirus cases as key drivers. It should be taking into account that prior to the reversal that started on Tuesday, the Dow Jones was above March highs.

The deterioration in risk sentiment boosted the greenback versus commodity and emerging market currencies. The best performers among currencies are the yen and the Swiss franc.

Data from the US released on Thursday (jobless claims and PPI) had no impact on the market that continues to be focused on the present and also on future expectations about the economy.

Levels to watch

A consolidation below 0.6435 would clear the way more losses in NZD/USD. The next critical support stands around 0.6400. On the upside, now 0.6465 is the immediate resistance followed by 0.6495.

 

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.