- NZD / USD is back at 0.7070 after another trip north of 0.7100.
- A drop in market risk appetite and a rally in the USD is to blame for Friday’s slide.
The NZD / USD managed to set new multi-year highs above the 0.7100 level again early on during Friday’s Asia-Pacific trade. However, since the start of the European session on Friday, the risk appetite has worsened and the pair has fallen back to 0.7070. On the day, the pair is currently trading with losses of just under 20 pips or around 0.2%.
Risk appetite drags the NZD lower
Friday’s trading has seen a demand for safe havens, that is, in the currency markets, the JPY and the US dollar have been two of the best. In fact, the dollar index (DXY) has risen again (although it has not exceeded) the level of 91.00. Meanwhile, global stocks have taken a hit, bonds have been offered, and crude oil markets have fallen. The NZD, which has traded on global rather than domestic issues, has seen a negative bias for the most part on Friday.
Some factors are behind the market’s defensive trade bias on Friday, but can be summed up as increased concern over the lack of progress in Brexit negotiations and US fiscal stimulus begins to weigh on broader market sentiment, as well as negative vaccine production / distribution updates.
As for the latest news on each of these issues, starting with Brexit; UK Prime Minister Boris Johnson has echoed the pessimistic tone of his EU counterparts on the prospects of a deal being reached, saying late Thursday that there is a strong possibility that we will not get a deal. agreement, a message he reiterated on Friday before adding that negotiations remain at a standstill ahead of Sunday’s new de facto deadline for a deal. However, the German foreign minister recently hinted that the talks could go beyond Sunday, seemingly downplaying the importance of this date.
On the US stimulus talks; A breakthrough remains elusive, and Senate Majority Leader Mitch McConnell dampened hopes of a deal last night by saying he sees no path to an agreement on the two main hot spots – aid for states and cities and protection responsibility). Meanwhile, the Senate must vote in favor of a week-long interim funding bill if it wants to avoid the shutdown of the United States government beginning at midnight Friday.
Finally, in terms of the latest vaccine news, while the FDA voted 17 to 4 that the benefits of taking the Pfizer vaccine outweigh the risks for those over 16 and the panel will now consider whether to grant emergency use authorization for the vaccine (all as expected), Sanofi and GlaxoSmithKline announced that they had delayed their program to develop vaccines to enhance the immune response elicited by the vaccine in the elderly. A candidate vaccine was also abandoned in Australia.
Technical levels
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