New Zealand Dollar Suffered Huge Losses Due to Covid-19

The New Zealand dollar fell to its lowest level in nearly three weeks on August 17 after the country identified its first Covid-19 case since February. The government already announced new short-term lockdown measures.

The kiwi dropped sharply in early Asian trading hours, extending losses around 06:30 GMT following Prime Minister Jacinda Arden’s announcement. She announced that Auckland would go into lockdown for seven days, while the country as a whole will have the toughest level of lockdown for three days.

The New Zealand dollar stood at $0.6927 at 11:26 GMT, its lowest point in days. It was on track for its largest daily fall since May.

New Zealand and Australia are trying to eradicate the virus. Both countries adopted a go-hard-and-early strategy that helped them to virtually eliminate the virus domestically. The country’s decision to impose restrictions at an interesting moment. On Wednesday, the Reserve Bank of New Zealand is widely expected to become the first central bank among developed countries to raise interest rates since the pandemic. Its economy is flourishing, so the central bank has the opportunity to raise interest rates.

Dollar and other main currencies

In other parts of the globe, the tone in currency markets was mostly risk-averse, as European stock indexes were in the red. China’s plans to regulate the internet sector affected Asian shares.

The U.S. dollar rose 0.1% to 92.701, after gaining in the previous session. The single currency was stable against the greenback at $1.1771.

The Australian dollar declined to its lowest level in nine months after central bank meeting minutes were seen as dovish. By 11:38 GMT the Australian dollar was down on the day at $0.7293.

The safe-have Swiss franc, as well as the Japanese yen, were close to the previous session’s 10-day high against the greenback. Weak economic data from China and the U.S. helped to boost the Swiss and the Japanese yen.

The British pound fell 0.3% as the effect of the stronger U.S. currency dominated over the domestic news.