NZD/USD: Under pressure below 0.6000, registers three-day losing streak
|- NZD/USD remains on the back foot while reversing pullback from the previous day’s low.
- New Zealand Treasury anticipated a 10% contraction in Q2 2020 GDP.
- Mixed Aussie data, coronavirus fears exert additional downside pressure.
Despite bouncing off the intra-day low of 0.5926, NZD/USD marks 0.17% losses while taking rounds to 0.5950/55 amid the early Asian session on Wednesday. In addition to the on-going fears concerning the coronavirus (COVID-19), downbeat comments from the New Zealand Treasury also weighed on the pair off-late.
Earlier during the day, comments from the New Zealand Finance Minister Grant Robertson raised fears of the virus pandemic on the economy. The Treasury not only anticipated a yearly contraction of 10% in Q2 2020 GDP but also expected a double-digit unemployment rate versus the 4.0% latest.
Before that, mixed activity numbers from Australia and US President Donald Trump’s threat signaling tough two weeks ahead exerted downside pressure on the pair. The kiwi traders should also know that the Fed offered additional helpline avail short-term US dollar purchases to the global central banks the previous day.
It should also be noted that the market’s risk-tone remains under pressure with the S&P 500 Futures following Wall Street’s footsteps and mark losses of near 1.0% by the press time.
Moving on, a lack of major data could keep markets looking for virus headlines for fresh impulse. Analysts at the Australia and New Zealand Banking Group (ANZ) said, “We remain more constructive on the NZD than on many other currencies on the food exporter thematic, but the NZD has never done well during synchronized global slowdowns and large-scale QE does risk capital outflows.”
Technical analysis
21-day SMA near 0.6020 and the recent high around 0.6070 guards the pair’s immediate upside.
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