- The NZD / USD recovers the losses of the Asian session to end the week in green, following the strength of the AUD.
- The kiwi had been weighed slightly by the cautious comments of the RBNZ governor.
NZD tracks the strength of its Australian counterpart
The NZD has managed to make a late return to positive territory on the day against its US dollar counterpart. For most of the session, the kiwi had been trading modestly in the red, with seemingly dovish comments from RBNZ Governor Adrian Orr during Friday’s Asian session weighing on the currency slightly.
Speaking to Bloomberg TV, the RBNZ governor noted that a recently discovered Covid-19 community case is a reminder of the risks the country faces. “If the economy continues to grow and do what it’s doing, well that’s a beautiful world, but that’s a big yes,” said a wary Orr.
His comments come after this week’s RBNZ rate decision, in which the central bank left the OCR rate unchanged at 0.25% (in contrast to the RBA which lowered its cash rate to 0.1%). from 0.25% the week before), left its QE program unchanged. to NZ $ 100B and, as expected, introduced a new Financing for Loans program, which analysts estimate will free up NZ $ 24B in cheap financing in the New Zealand economy. The bank also noted how the economy had performed better than previously anticipated, an acknowledgment that, at the time, it spurred strength in the NZD and helped markets assess the possibility of negative interest rates in New Zealand in 2021.
Orr’s slightly more cautious tone may well have been aimed at overpowering the NZD’s positive reaction to the rate decision earlier in the week; After all, the RBNZ still sees the strength of the NZD as a drag on the economy.
However, amid a quiet weekend for currency markets, his comments generally haven’t turned the dial too much for the NZD, which has followed its Australian counterpart’s gains in recent trading amid a falling AUD. gradually weakens.
NZD / USD Disappoints Bulls Hoping for Retest of 0.6800
Traders who wanted to long NZD / USD just before the previous September 14 highs at 0.6800, with stops potentially located just below the September 2 highs at 0.6790, were disappointed on Friday, after the pair will mark its low of the day at 0.6811.
To the upside, there are no notable resistance levels getting in the way of the NZD / USD and 0.6900, above which is Wednesday’s high of 0.6914. Beyond this week’s high, the next notable resistance comes in the form of a retracement double top in February and March 2019 just below 0.6940.
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