NZD/USD testing multi-month highs at 0.6230

• NZD/USD bounces up at 0.6150 to re-test 2, 1/2  highs at 0.6230.
• The kiwi appreciates as market sentiment improves on economic recovery hopes.
• NZD will remain positive while above 0.6150/70 – ANZ.

The New Zealand’s dollar is trading on a bid tone on Thursday, with the safe-haven US dollar pulling back amid a brighter market mood. The kiwi has managed to bounce at 0.6150 and retrace Wednesday’s losses returning above 0.6200, with the mid-term high at 0.6232 on sight.

NZD regains lost ground as risk appetite returns

The risk-sensitive NZD/USD has appreciated about 0.5% so far today, with the US dollar approaching multi-month lows against its main peers. The moderate improvement on risk appetite amid economic recovery hopes as the main economies re-open has offset concerns about geopolitical tensions, pushing oil and equities higher and weighing on the safe-haven USD.

Furthermore, a set of mixed US macroeconomic figures have failed to support the dollar. The preliminary US Gross Domestic Product estimation has shown a 5% contraction in the Q1, beating the market consensus of a 4.8% decline. Furthermore, jobless claims increased by 2.1 million on the week of May 23 pushing the 10-week total beyond 40 million while orders for durable goods declined by 17.2%, less than the 19% expected.  

NZD/USD biased higher while above 0.6150/70 – ANZ

The FX analysts’ team at ANZ see the kiwi positive whole global recovery euphoria lasts, “As we have flagged for a while, a lot of good news is now priced in and NZD will be under pressure if the mood changes (…) Long-term, we’re concerned about global unemployment, slowing growth and the income shock of that.”

Regarding technical levels, ANZ experts point out at 0.6150/70, “Technically, the fact that we have held support at the old 0.6150/70 resistance level is a positive.” 

NZD/USD key levels to watch