NZ Dollar Hits 20-Month High

The New Zealand dollar is unchanged in Wednesday trade. Currently, is trading at 0.7062, up 0.02% on the day.

Commodity indicator shows strong gain

The New Zealand dollar posted considerable gains on Tuesday, after posting mixed data. The GlobalDairyTrade Price Index posted a strong gain of 4.3%, its best performance since July. New Zealand exports 95% of its milk production, so this reading points to stronger prices for commodities, which is good news for New Zealand’s critical export sector. The news was less positive from the Overseas Trade Index, which came in at -4.7% in the third quarter. We’ll get another look at the health of the export sector, with the release of ANZ Commodity Prices on Thursday (00:00 GMT).

The Covid-19 pandemic has resulted in a sharp economic downturn in New Zealand, but the damage appears to be less than expected. According to the ASB Bank’s Quarterly Economic Forecast, GDP will decline by 3 per cent in 2020, a much better outlook than the 6 percent than the March forecast of 6-7 percent. The reports noted that the economy was benefitting from the strong rebound in China, which has boosted New Zealand’s food and commodity exports. For the markets, perhaps the key point in the ASB report was it did not expect the RBNZ to introduce negative interest rates. The central bank had raised this as a possibility only a few months ago, but with the economy recovering more quickly than expected, this idea has been put back on the shelf. Recently, RBNZ Governor Orr stated that the Official Cash Rate of just 0.10% had ensured that the New Zealand dollar remained competitive. Orr is no doubt continuing to cast an anxious eye on the ascent of the kiwi, which soared by 6.1% in November, its best month in over seven years.

NZD/USD Technical

NZD/USD Daily Chart
  • NZD/USD tested resistance at 0.7077 in the Asian session. The next resistance line is at 0.7129
  • There is support at 0.6935, followed by support at 0.6845

Original Post

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

This site uses cookies to offer you a better browsing experience. By browsing this website, you agree to our use of cookies.