NZD/USD hits two-month low after registering biggest weekly loss since June

NZD/USD fell to a fresh two-month low of 0.6453 soon before press time. The currency pair attempting a bounce in early Asia, but faced rejection at 0.6469. 

Weekly loss

The Kiwi fell by 2.19% last week to register its biggest weekly decline since the second week of June. Back then, the pair declined by 2.6%. 

The New Zealand dollar was offered last week on fears that the coronavirus outbreak in China could turn into a pandemic, derailing the global economic recovery. 

Growth to slow in 2020

New Zealand's Treasury is expecting a slower gross domestic product growth this year. The GDP expanded 0.7 percent on quarter in the three months to September 2019. 

"Data released over December and January showed a more optimistic near-term outlook for the domestic economy, but coronavirus poses a new risk," New Zealand Treasury's monthly report showed on Monday. 

The report added that the improvement in the global outlook has been set back by the coronavirus outbreak. 

With Treasury presenting a bearish outlook, the NZD may have a tough time cheering the signs of risk reset in the equities.

While the Chinese markets have gapped lower after a week-long holiday, the S&P 500 futures are reporting a 0.68% gains at press time. Further, China has reduced borrowing costs on a 7-day reverse repo from 2.5% to 2.4%. The interest rate on 14-day reverse repo has been reduced to 2.55% from 2.65%. 

Technical levels