NZD/USD pulls back regain footing above 0.6100 amid coronavirus woes
- NZD/USD bounces off the four-day low amid broad risk reset.
- New Zealand Business NZ PMI surged to the highest in a year.
- Coronavirus headlines continue to remain grim.
- Spanish regulators ban short selling, the US Senate failed to pass the COVID-19 stimulus package, US airstrikes on Iranian bases in Iraq.
With the mixed data from New Zealand joining risk reset, NZD/USD manages to bounce off 0.6085 to 0.6130 by the press time of Friday’s Asian session. However, fears of the broad coronavirus (COVID-19) outbreak keep the market’s fears intact as global policymakers struggle to tame the pandemic.
New Zealand’s Business NZ PMI for February beat 50.3 forecast and 49.6 prior with a good margin to 53.2, the highest since February 2019. However, the Food Price Index (MoM) failed to keep up to the expectations of 0.2% while marking 0.0% figures.
In addition to failing to match the broad expectations from the US coronavirus relief bill, the Trump administration is on the verge of getting the bill delayed to the next week. The reason could be traced from the Senate’s inability to pass the package by the end of Thursday, the last day of the week for the house.
Elsewhere, market regulators from Spain and Italy are suspending short-selling of some stocks while the CBOE Global Markets is to suspend open outcry trading on the Chicago trading floor due to the virus outbreak. Additionally, New Zealand PM Jacinda Ardern recently turned down the need to cancel large community gatherings in the nation.
Furthermore, Ohio state official estimates more than 100,000 cases of the disease whereas Fitch warned of further consequences to global structured finance amid the broad push to contain the virus.
While the aforementioned catalysts have dragged global equities to multi-year lows and weighed on the treasury yields the previous day, New Zealand 10-year yields have been the best among the G10 currencies. The reason could be spotted from the RBNZ’s refrain to jump into the line of other major central bank leaders that have announced measures to tackle the COVID-19.
Concerning this, the Australia and New Zealand Banking Group said, “the RBNZ has argued that they have plenty of time to think through their response, but with developments rapidly escalating on the global health, economic and financial fronts simultaneously, that seems optimistic. Similarly, the NZ Government is focusing on developing micro responses for the sectors most affected by the initial hit to trade in goods and services with China, but this is much bigger than that.”
Technical Analysis
Unless recovering back beyond February month low of 0.6192, the NZD/USD prices continue to remain vulnerable to visit the 0.6000 psychological magnet.