NZD/USD Keeps Steady Around Weekly Lows
• NZD/USD trading at a four-month low
• Broad US dollar strength pushing the pair to the downside
NZD/USD Now Near 0.70 Mark
The NZD/USD pair is hovering off its weekly lows during the trading hours of the European session on Thursday. The bounce from yesterday’s bottom of 0.6955 is an attempt from the bullish camp to initiate some upside momentum which so far is not yielding any significant result. The pair continues to struggle to gather buying drive while US dollar strength keeps a lid on the exchange rate. The pair is now trading essentially flat at 0.6970.
Recently, the NZD/USD has been in a downtrend. Ever since the pair reached a three-year top at 0.7464 on Feb 25, the rate has slid almost 7% to current market price. Prior to reaching the top, it was on a long-term uptrend since March last year. The trend resulted in a climb of over 36% in less than 12 months.
On Wednesday, the NZD/USD reached a four-month low, breaking below 0.6960 and briefly traded at levels last seen in late November last year. Broad US dollar buying has been narrating the currency market this week. As a result, the NZD/USD pair continues its weak performance for a third consecutive day on Thursday.
Housing Market Measures and Vaccine Program in the US
Domestic developments in New Zealand are partially responsible for the depreciation of the New Zealand dollar. The government announced on Tuesday it is introducing a series of measures to provide stability in the housing market. The move put aside concerns that the Reserve Bank of New Zealand (RBNZ) would raise interest rates.
On the other side of the trade, the US dollar strengthened. This was due to success over the vaccine program in the US, combined with a decline in daily Covid-19 cases. In addition, the outlook for the US economy is looking bright now that the $1.9tn stimulus bill has been approved and is already being sent out to businesses and individuals. Moreover, another stimulus package is in the making. A sweeping $3tn economic plan aimed to provide funding for infrastructural changes that would substantially improve the quality of life and lead the country to a greener future underpinned by sustainable energy.