Sun, July 21, 2024

New Zealand Dollar fell against U.S. dollar. Euro stays low

New Zealand Dollar fell against U.S. dollar. Euro stays low - NZD

The New Zealand Dollar declined on Friday due to the investors’ risk-off tactic. Experts and traders continue to monitor coronavirus’s outbreak closely. So far, the death rate is growing, which, on the other hand, prompts investors to move on safe-haven currencies. As China is New Zealand’s major trading partner, such a situation influences New Zealand’s currency too.

The NZD/USD lowered by 0.05% on Friday, settling at .6435. The Reserve Bank of New Zealand made several remarks last week, which boosted its currency for a while. However, the experts are still counting the damage against the country’s economy caused by the coronavirus. 

Meanwhile, the dollar fluctuated against different currencies in early trading on Monday. Before that, it hit a new four-month high in overnight trading. After the People’s Bank of China added to its already extensive stimulus measures to boost its economy, the yuan strengthened moderately against the dollar. 

However, these measures further reflated Chinese asset markets, causing the benchmark stock index to stay where it was before the New Year holiday. And so far, they weren’t overly successful in dispelling the damage due to the outbreak. 

The dollar strengthened slightly against the Sterling at $1.3029. EUR/USD has also climbed up from last week’s lows to $1.0838. According to Nordea analyst Martin Enlund, the euro may be close to its near-term lows.

Enlund wrote that hard data looks terrible in Germany, and the usually-reliable Ifo survey suggests that peak negativity around German hard data is also close.

What about the Japanese yen? 

The Japanese yen dropped against the dollar due to the new data. According to it, the Japanese economy lowered 6.3% in the fourth quarter. The analysts expected a 3.7% drop, but the results were much worse despite the yen’s recent rallies as a safe-haven asset. USD/JPY was at 109.86, up 0.1% at last.

Paul Donovan, UBS Wealth Management chief economist, announced that annualization always exaggerates trends. He also noted the one-off hits from a sales tax increase in October and a subsequent typhoon.


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