NZD/USD breaking up 0.6900 as markets presume steady RBNZ for longer

• NZD/USD drifts through the 0.69 level to print fresh cycle highs as the dollar starts to slide and with RBNZ in focus.
• The US dollar is under pressure again as the coronavirus spread takes the market's market attention. 

NZD/USD is testing above 0.6900 to print a high of 0.6914 following yesterday's Reserve Bank of New Zealand meeting and additional comments today from the reserve bank's assistant governor, Christan Hawkesby. 

NZD/USD has travelled from a low of 0.6879 from the start of the Asian session and is up some 0.32% at the time of writing. 

Hawkesby is saying that the bank has not changed its guidance on keeping OCR at 0.25% until March 2021 and that the economy is performing more strongly than expected in August this year.

This has given the kiwi a boost against the US dollar, but not against the yen nor the Aussie. 

DXY has now turned negative for the session, testing the 21-hour moving average:

Daily chart:

The dollar, according to the daily chart, is struggling since meeting a 50% mean reversion of the full leg down from the early November highs. 

The prospects of the GOP keeping the Senate may not be enough to propel the greenback much higher in an environment where the spread of the coronavirus is mounting to record daily highs and throughout all of the US states.

More in this here: US covid outbreak uncontrolled throughout all states

A vaccine was warned to not be enough 

New York City-based drug company Pfizer made a breakthrough announcement on 9 November of a vaccine that has proven to be successful in trials 90% of the time.

It offers the first compelling evidence that a vaccine can prevent COVID-19 — and bodes well for other COVID-19 vaccines in development. 

However, the positiveness of the vaccine news, while welcomed by financial markets, has now started to wane considering the rate of global infections. There are too many variables and uncertainties.

Questions remain about how much protection it offers, to whom and for how long.

With Pfizer Inc.’s Covid-19 vaccine is on track to be authorized as early as next month, governments are facing an enormous logistical challenge in getting enough people a shot in the arm.

The US dollar has subsequently weakened due to the dying prospects of less stimulus for a shorter time frame.

There were numerous warnings prior to the news that warned a vaccine will not stop people from getting ill and dying. 

The World Health Organization previously said that a vaccine will be a “vital tool” in the global fight against the coronavirus, but it won’t end the Covid-19 pandemic.

ANZ Bank sees NZD/USD consolidating around 0.68 

Meanwhile, analysts at ANZ bank explained that they have upgraded our NZD forecasts and now see it consolidating around 0.68 over coming quarters, benefitting from better local data and improving global sentiment.

''At the same time, our new and more gradual easing path for the OCR is less of a weight on the Kiwi. Our new OCR forecast does go negative next August, but that call is conditional and we have a stop at 0.10% (in May) along the way.''