Aussie dollar was steady. What about New Zealand dollar?

Australian dollar

Riskier currencies rallied on Tuesday despite the surging coronavirus cases. Rapidly spreading infection is casting doubts over the global recovery. Still, the New Zealand dollar skyrocketed by 0.3% to a one-month high of $0.6580. Imre Speizer, the FX analyst at Westpac in Auckland, noting that it could reach $0.67 if sentiment holds. On the other hand, the Australian dollar traded steady at $0.6976.

The Aussie and the Kiwi are making a renewed tilt at the top of the ranges they have held for weeks. The worst is probably over, but a swift recovery cannot be taken as the base case – stated Terence Wu, a strategist at Singapore’s OCBC Bank.

However, Australia resolved to shut the border between its two most populous states at midnight on Tuesday, attempting to contain a Covid-19 outbreak in the city of Melbourne.


How is the U.S. dollar faring?

The U.S. dollar lowered on Tuesday as riskier currencies gained. Traders turned from safe-havens due to the better-than-expected U.S. services data. This boosted confidence in a global economic recovery from the coronavirus pandemic. Against a basket of currencies, the greenback traded near a two-week low.

According to new data, U.S. service industry activity rebounded to almost pre-pandemic levels last month. The headline figure of 57.1 surpassed the expectations of approximately 50.2.

Speizer noted that economies are back to something that looks like a V-shape again. The dollar tends to go down if the sentiment is strong because it’s a safe-haven.

Still, coronavirus poses a danger for bolstering the economy. Florida’s greater Miami area stopped its reopening, ordering all restaurant dining closed on Monday as Covid-19 cases increased nationwide by the tens of thousands. The U.S. death toll has already surpassed 130,000.

Meanwhile, the Chinese yuan hit high, briefly breaking past the 7 per dollar barrier. A front-page editorial in the China Securities Journal, affiliated with state-run Xinhua, announced that fundamentals laid the foundation for a healthy bull market, causing the currency’s rally.

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