- NZD/USD wobbles as RBNZ leaves benchmark interest rate unchanged.
- Hopes of US stimulus, coronavirus vaccine combat trade/political fears concerning America, virus woes.
- Global markets turn dicey amid a lack of major data/events, US holiday, RBNZ Governor Orr’s press conference eyed.
NZD/USD declines over 25 pips while refreshing the intraday low of 0.6809, before bouncing back to 0.6835, during early Wednesday. The pair recently reacted to the RBNZ’s status-quo, as far as the benchmark interest rate is concerned, while cheering the change in the Large Scale Asset Purchases (LSAP).
As per the recent action, RBNZ keeps the Official Cash Rate at 0.25% while adding 100 billion dollars into the LSAP. The Bank also marked readiness to cut the rates to negative.
Read: Breaking: RBNZ unchanged and sticks to guidance of March 16
Market’s risk tone remains mostly sluggish as US Treasury trading is off due to the Veterans Day holiday. However, hopes of stimulus from America join the recent developments in the coronavirus (COVID-19) to occupy the positives. On the contrary, the recently strong covid figures from Europe and the US, coupled with the US-China, the Brussels-Washington tussles, add to Donald Trump’s challenge to the latest election results while challenging the risk-on mood.
Against this backdrop, S&P 500 Futures stay negative, down 0.17% by press time, for the second consecutive day whereas stocks in the Asia-Pacific region are mostly up by the time of the wiring.
Having witnessed the initial market reaction to the RBNZ moves, the NZD/USD traders await comments from the RBNZ Governor Adrian Orr for further clarification of the New Zealand central bank’s bearish bias. Should Orr and Company rekindle growth expectations, bulls are likely to regain the controls.
Beyond the RBNZ-led action, the kiwi pair is less likely to mark any major moves amid an off in the US Treasury floor and a lack of major data/events elsewhere. Though, virus headlines, further challenges to US President-elect Joe Biden’s victory can offer intermediate moves.
Technical analysis
NZD/USD bulls’ ability to keep the 0.6800 threshold directs them towards February 2019 top surrounding 0.6900 before highlighting the 0.6940/45 region, comprising the year 2019 peak, for the buyers. Meanwhile, a clear downside past-0.6800 can fetch the quote towards re-test October high near 0.6725.
Share
