NZD/USD recovers from session lows as S&P 500 futures trim losses
- NZD/USD trims losses alongside a recovery in the US stock futures.
- Risk reset looks likely with oil flashing green and showing signs of stability.
The New Zealand dollar looks to be tracking the action in the US stock futures.
The NZD/USD pair is currently trading largely unchanged on the day at 0.5940, having put in a session low of 0.5910 an hour ago.
The Kiwi has recovered from session lows alongside a bounce in the S&P 500 futures from the low of 2,722 reached about two hours ago. The futures are now trading near 2,783, representing a 0.18% decline on the day.
The stock futures fell by more than 0.5% in early Asia, strengthening the bid tone around the safe-haven US dollar and pushing the NZD/USD lower, possibly in response to comments by the director of the US Centers for Disease Control and Prevention (CDC) that a second wave of the coronavirus outbreak in the fall could be worse than the one we just went through.
Looking ahead, the Kiwi dollar could continue to gain ground against the US dollar, as oil prices look to have stabilized and will likely keep the S&P 500 futures from posting sharp losses.
The West Texas Intermediate's (WTI) June futures contract is currently trading at $14.30, representing a 3.8 percent gain on the day. Oil prices fell sharply on Monday and Tuesday on oversupply concerns.
New Zealand's Prime Minister (PM) Jacinda Ardern was out on the wires a few minutes before press time, stating that the government will look at all options to stimulate the economy. The PM's assurance may bode well for the New Zealand dollar.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
