NZD/USD wavers around 2.5-year high below 0.7000 even as RBNZ’s Orr backs low interest rates
|- NZD/USD keeps the choppy trading above 0.6965, easing five pips off-late.
- RBNZ Governor Adrian Orr says low interest rates ensure NZD’s competitiveness, RBNZ FSA struck upbeat statements.
- Market sentiment stays upbeat on US President-elect Joe Biden’s power shift.
- A light calendar in Asia highlights risk news for fresh impulse.
NZD/USD pays a little heed to RBNZ Governor Orr’s downbeat comments despite stepping back a few pips to 0.6971 amid the early Wednesday morning in Asia. The reason could be spotted from the upbeat sentiment concerning Biden’s formal entry into the White House affairs.
In addition to favoring the lower interest rate, not rate cuts though, RBNZ Chief Orr also assured intention to work with the government on long-term goals of housing affordability. The central banker closely turned down Finance Minister Grant Robertson’s push for considering housing prices for remit on Tuesday.
Read: RBNZ’s Orr: Low interest rates ensures NZD exchange rate remains competitive
With Donald Trump’s hesitant acceptance of defeat in the 2020 US General Elections, Biden now has the power to receive the President’s Daily Brief and the collection of classified intelligence reports prepared for the national leader. Having gained that, the Democratic member recently crossed wires while opposing the Irish border issue.
Even so, hopes that the Democratic government will push for stimulus, together with expectations of pro-economic plans from ex-Fed Chair Janet Yellen, likely to be the next Treasury Secretary, also backed the risk-on mood. Also favoring the optimists were upbeat news on the coronavirus (COVID-19) vaccine.
That said, Wall Street benchmarks like DJI30 and S&P 500 recently closed at the record highs by the end of Tuesday whereas the US 10-year Treasury yields also gained 2.6 basis points to 0.88% by press time.
Considering the lack of major data/events, NZD/USD traders may extend the current upside momentum with a lesser pace. Though, risk news can keep entertaining the market players.
Technical analysis
A downside break of December 2018 top near 0.6970 can recall the early 2019 high surrounding 0.6945/40. Alternatively, the 0.7000 round-figure and the mid-2018 peak close to 0.7045 lure the NZD/USD buyers.
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