- NZD/USD struggles to hold onto early-day recovery.
- RBNZ’s Hawksby turned down calls of negative interest rates.
- US dollar registers broad gains, risk resets ahead of the BOJ, China data-dump.
NZD/USD fails to hold onto the early-day recovery gains while declining to 0.6020, down 0.80%, by the press time of early Monday. While a surprise rate cut from the Fed ward off the negative implications of the RBNZ before a few hours, comments from the RBNZ policymakers seem to fail to please the bulls.
The RBNZ announced a surprise 0.75% rate cut and delayed the capital requirement relating norms by a year during the early-Asia. Following the decision, the RBNZ Governor Adrian Orr crossed wires while turning down the odds of any further rate cuts at least for a year.
However, comments from the RBNZ’s Assistant Governor Hawksby that the RBNZ will not announce a limit or cap on any particular unconventional tool as well as evidence suggest this is a global and domestic economic shock of medium-term nature seem to weigh on the New Zealand dollar.
Also exerting downside pressure on the Kiwi pair is the broad US dollar strength amid expectations that the US policymakers will not step-back for any reforms to counter the pandemic.
The risk-tone remains troubled with Asian equities moving between mild gains and losses while the US 10-year treasury yields flash 0.659% by the time of writing.
China’s February month Retail Sales and Industrial Production can offer immediate direction while coronavirus headlines, central bank news will be the key catalyst to watch.
Technical Analysis
Unless providing a daily close beyond February month low near 0.6190, buyers are less likely to enter.
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