- The NZD / USD is declining while the RBNZ has announced additional stimulus measures.
- Prime Minister of New Zealand (NZ) Ardern warns of difficult times ahead and announces more investments.
- Fears of a trade war remain current, the risk of resurgence of the coronavirus (COVID-19) is also looming.
- An RBNZ Orr speech will be watched before waiting for the Fed Powell.
The NZD / USD fell 70 pips to reach the intraday low of 0.6028, currently around 0.6050, after the RBNZ decision on Wednesday morning.
Statistics New Zealand (Stats NZ) recently released preliminary trade data for the period February 1 to May 6. The result suggests that total exports to all countries decreased by 8.0% while total imports increased by 3.5%. The data also showed that there was an increase in imports from China compared to exports, which in turn suggests the effect of the virus.
Following this, New Zealand MP Jacinda Ardern mentioned that the nation was about to enter a very difficult winter and announced additional measures to fight the pandemic.
the Kiwi The pair recently struggled amid concerns over the trade war and optimism surrounding the economic recovery in New Zealand. Although China’s struggle is mainly with the United States and Australia, it is of great concern to one of its trading partners and an ally of Australia.
Elsewhere, the outbreak of virus from Germany and the Wuhan epicenter seems to rekindle fears of a further spread of the virus. The resulting measures also call into question the reopening of the Kiwi Nation.
That said, the sentiment of market risk remains heavy, with yields on US bonds and stocks in the Asia-Pacific region posting losses at the time of writing.
61.8% Fibonacci retracement of the pair’s decline between January and March, as well as the 200-day EMA, near 0.6265 and 0.6325 respectively. Meanwhile, an upward trend line from early April, at 0.5970 now, can limit the pair’s short-term declines.