Euro May Follow NZ Dollar Higher as Germany Eases Lockdown
EUR, NZD, CAD, NOK, S&P 500, US DOLLAR, COVID-19, CORONAVIRUS – TALKING POINTS:
- New Zealand Dollar up as PM moves to ease lockdown. Euro next?
- Canadian Dollar, Norwegian Krone sink alongside crude oil prices
- S&P 500 futures hint US Dollar may keep rising in risk-of trade
The New Zealand Dollar rushed higher at the start of the trading week after Prime Minister Jacinda Ardern announced that the country will begin relaxing coronavirus lockdown measures on April 27. The spotlight now turns to Germany, which is due to begin dialing back some of its own restrictions.
If this offers a degree of support to the Euro, that might mean markets are prepared to endorse officials’ timing at face value. That such confidence can be had about a region far more exposed than New Zealand may speak to a broader recovery in sentiment.
Chart created with TradingView
US DOLLAR MAY EXTEND RISE AS MARKETS TURN DEFENSIVE
Nevertheless, the durability of any such upswell seems suspect. Indeed, the Kiwi Dollar aside, the G10 FX space bore the signs of risk aversion. The Canadian Dollar and the Norwegian Krone fared particularly poorly as crude oil prices plumbed 19-year lows. The haven US Dollar traded broadly higher.
The downbeat mood seems to show anxiety ahead of a busy week of first-quarter earnings reports. Guidance from a slew of top-tier firms will help illustrate how much lasting damage Covid-19 has done to the global economy. Bellwether S&P 500 futures point lower, hinting that a defensive tone may persist.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.