NZD/USD declines below 0.5800 amid the latest risk reset

NZD/USD drops to 0.5790, currently around 0.5805, following its pullback from the weekly high during the Asian session on Thursday. The kiwi pair failed to cheer the US COVID-19 Bill for longer as the policymakers jostle over the details and the execution. Also, likely weighing on the pair could be the latest coronavirus (COVID-19) updates that signal fears emanating from the UK and Tokyo.

Despite agreeing over the $2.2 trillion packages to combat the deadly virus, the US Senators witness differences as far as the execution of the aid bundle is concerned, as signalled by Fox News. As a result, the policymakers are soon expected to vote on the amendment concerning the unemployment insurance provisions in the coronavirus relief package.

On the other hand, the big jump in the coronavirus numbers from the UK and looming fears of the Tokyo lockdown weigh on the risk-tone. Also adding to the skepticism could be US President Donald Trump’s worries concerning New York City due to the pandemic.

Recently, the Governor of Colorado ordered a state-wide stay-at-home order and magnified the risk-off.

That said, the US 10-year treasury yields step back from earlier recoveries while declining three basis points (bps) to 0.83% whereas the US stock futures also fail to replicate Wall Street’s gains.

Apart from the voting on the US COVID-19 bill, the US Jobless Claims is likely to grab a major attention today as the figure is expected to surge, to 1000K from 281K prior, due to the pandemic. Also important will be the coronavirus updates from the rest of the globe as well as the final reading of the US fourth quarter (Q4) GDP growth, expected to remain unchanged at 2.1%.

Technical analysis

10-day SMA near 0.5840 offers the immediate upside barrier to the pair while sellers will wait for entry below 0.5730.