- NZD/USD stays positive as trade sentiment recovers.
- Global combat against coronavirus intensifies, the US leads the fight.
- A light economic calendar will keep the market focus on risk catalysts.
- RBNZ is expected to announce rate cut, timing is the key.
With each day of delay by the RBNZ to announce its mostly priced rate cut, the NZD/USD manages to add some more gains. That said, the kiwi pair currently marks +0.08% gains to 0.6300 by the press time of Thursday’s Asian session.
Following the Bank of Canada’s (BOC) 0.50% rate cut on Wednesday, the RBNZ becomes the only one left out in the Dollar corridor to announce rate reduction to fight against the coronavirus (COVID-19). While the event is widely anticipated, the delay in providing the kiwi traders time to add some profits to prepare for any such news.
Also contributing to the pair’s recovery moves could be the overall pullback in the market’s risk-tone. The traders’ fraternity might have to take a sigh of relief as global policymakers are on their run to tame the negative impacts of the deadly virus.
In doing so, the US is the most active with Fed rate cut, emergency funding bill and alterations of reserve capital rules for the banks. Further to the traders’ relief could be the US data that has registered a positive outcome on Wednesday.
With this, the US 10-year treasury yields extend their recovery gains to 1.047% after Wall Street benchmarks registered nearly 4.0% gains each.
Looking forward, coronavirus headlines will be the key as the economic calendar is light in Asia.
Technical Analysis
November 2019 low near 0.6315, 21-day SMA around 0.6360 and February 11 low of 0.6377 are likely consecutive upside barriers for the Kiwi buyers to confront during the further recovery. On the contrary, 0.6260 and 0.6200 can question short-term bears.
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