NZD drowns after a new COVID-19 case is discovered in Auckland
The best case scenario for Kiwi is that the latest community case is somewhat limited and will not interfere with RBNZ’s tightening plans. The central bank must meet tomorrow and suddenly a last-minute curve will be thrown at policymakers.
But if the situation turns out to be similar to Australia, it will be a massive blow to the kiwi feeling and the outlook for the NZ economy over the next few weeks / months.
This rejects all expectations of an RBNZ rise in interest rates and the time the market is watching, and kiwi is one of the favorites of the recent “divergence” trade.
Now it’s all put on the ice until there is more clarity about the New Zealand virus situation, the next few days are tight on the kiwi.
AUD / NZD has seen a big setback today, as the negative momentum will fall if the first target is tested, ie the lowest level in December @ 1.0418-23.
From a technical point of view, this is the main feature of the sand that buyers are currently adhering to, as the fundamentals are starting to change again in pairs.
For sellers, getting the latest headlines and a key technical goal is a good break – at least for now – until you have a better idea of how things work.