Listen to the latest market mood for the NZDUSD pair.

Weak NZD, Strong USD

The NZD is pressured after the RBNZ’s Monetary Policy Committee announced this week where they said they were prepared to provide additional stimulus as necessary. As well as potentially expanding the Large Scale Asset Purchase (QE) programme, the Committee continues to prepare for the use of additional monetary policy tools as needed. This, in line with a dovish tone, has kept the NZD pressured during the session.

The USD has benefited from risk off flows as the US is reportedly targeting $3.1 bln of exports from France, Germany, Spain and the UK with tariffs. On top of this rising COVID-19 cases around the world is keeping the risk off trade supported with the sad news that Texas hospitalisations increased by +7.3% to 4389,California cases rose a record +3.9%, and Florida’s positivity rate jumped to 15.9%.

Therefore, expect NZDUSD sellers for the rest of today’s session.

We expect this outlook to play out over the rest of this day.

Main Trade Risks

• Market switching to risk on and discounting the relatively small targeted tariff amount of US imports from the EU. (The total amount of imports from EU is around $515bln).
• Second main risk is the drop in COVID-19 cases prompting dollar selling.