NZD/USD bears ignore PBOC to attack 0.6800 as coronavirus woes escalate
- NZD/USD remains pressured near yearly low after PBOC inaction.
- New Zealand marks 11 new cases taking total to 31, infections spread to Wellington.
- PBOC matches the market forecast to keep one-year and five-year LPR unchanged.
- Bears to keep the reins amid virus woes, light calendar may challenge momentum traders.
NZD/USD sellers attack the lowest level since November 2020, flashed the previous day, as the Delta covid variant fears escalate in New Zealand. In doing so, the kiwi pair pays little heed t to the People’s Bank of China (PBOC) Interest Rate Decision announcement. That said, the quote remains pressured around 0.6808, down 0.38% on a day, during early Friday.
Reuters came out with the New Zealand Health Ministry report stating, “New Zealand has 11 new cases of COVID-19 on Friday, bringing the total infections associated with the current community outbreak to 31.” Of the 11 new cases, eight are in Auckland and three are in Wellington. The three in Wellington had recently traveled to Auckland, the statement said.
On the other hand, the PBOC kept its one-year Loan Prime Rate (LPR) unchanged at 3.85% for the 16th straight month at its August fixing on Friday. The Chinese central bank also left the five-year LPR untouched at 4.65%.
Read: PBOC 1&5 year loan prime rates left unchanged, as expected
It should be noted that the worsening coronavirus conditions in the Asia–Pacific bloc and the Western leaders’ failures to tame the strains challenge the global economic recovery. While spotting the fears, the global rating giant Moody’s said, “The US is expected to lead the gains with a strong 6.4 percent rebound in 2021, followed by Asia with a 6.1 percent expansion, anchored by China’s stabilizing growth and India’s turnaround in the post-restrictions phase.”’
Amid these plays, the US 10-year Treasury yields and S&P 500 Futures remain pressured, down 0.11% and one basis point respectively, at the latest.
Moving on NZD/USD traders may keep their eyes on any covid headlines from New Zealand, mainly the one around 03:00 AM GMT, for fresh impulse.
Overall, bears are likely to keep the reins as covid woes join tapering tantrums.
Technical analysis
A clear downside break of July’s low, near 0.6880, directs NZD/USD prices towards September 2020 peak surrounding the 0.6800 threshold.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
