News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/pS48NIuwqX
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/gFVVZTGbe1
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/nHXiNJhLes
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/h0TmJcZeqr
  • $USDCAD sold off aggressively last week, putting it into position to test the important 2017 low; trading bias is neutral to bearish. Get your market update from @PaulRobinsonFX here: https://t.co/sphxUAW9TB https://t.co/ZhsTeJOOM8
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/qP96xmgDVn
  • The pro-risk Australian Dollar may extend gains after the record miss in US jobs data, amplifying dovish rhetoric from the Federal Reserve and keeping the Dow Jones and S&P 500 intact. Get your market update from @ddubrovskyFX here: https://t.co/yf8mPX3O3W https://t.co/uCCmjaxUhF
  • Who else is keeping close tabs on Dogecoin $DOGE this weekend? All eyes on Elon Musk @elonmusk, the proverbial 'Dogefather,' and his Saturday Night Live @nbcsnl performance kicking off at 11:30PM ET. The #crypto is already looking nice and perky following that trendline break! https://t.co/nrQsnlUqWj https://t.co/4lOz6NLQTG
  • There is some very interesting event risk over the opening half of this coming week of trade. It starts with Elon Musk hosting SNL tonight for Dogecoin traders and moves into US inflation data to as means to stir the ongoing Fed debate and Dollar https://www.dailyfx.com/forex/video/daily_news_report/2021/05/08/Dollar-Tumbles-Dow-Hits-Record-Highs-and-Dogecoin-Traders-Tune-In.html https://t.co/LXhjv7ToWC
  • It was a big week for Gold bulls and Gold prices broke out to fresh two-month-highs, finally taking-out the 1800 level along the way. Get your market update from @JStanleyFX here: https://t.co/D222Ni37Dv https://t.co/KcMYyx3Ro4
New Zealand Dollar Plunges As RBNZ Boosts Large-Scale Asset Purchase Program

New Zealand Dollar Plunges As RBNZ Boosts Large-Scale Asset Purchase Program

Daniel Moss, Analyst

NZD/USD, New Zealand Dollar, RBNZ Interest Rate Decision, LSAP – Talking Points:

  • The New Zealand Dollar plunged after the RBNZ expanded the LSAP programme up to $100 billion
  • The first Covid-19 cases recorded locally in 102 days could fuel further downside for the risk-sensitive currency

The New Zealand Dollar capitulated after the Reserve Bank of New Zealand announced the expansion of “the Large-Scale Asset Purchase (LSAP) programme up to $100 billion” and flagged the potential deployment of “additional monetary instruments”. Inclusive of foreign asset purchases and a negative OCR.

Although the RBNZ kept the official cash rate steady at 0.25%, it seems as though this could be but temporary in nature as committee members “agreed any move to negative rates could be effective”.

This willingness to “provide additional stimulus as necessary” could see the RBNZ continue to dive into its monetary policy toolbox, as the “return to social restrictions in New Zealand” proves that the “domestic economic outlook remains dependent on the containment of the virus”.

Therefore, it appears that the New Zealand Dollar could come under increasing pressure should local health developments force the hand of the RBNZ.

Even though recent economic data suggests the local economy is performing better than expected.

New Zealand Dollar Plunges As RBNZ Boosts Large-Scale Asset Purchase Program

NZD/USD 5-minute chart created using TradingView

New Zealand Economy Exceeding Expectations

Covid-19 developments aside, recent economic data has suggested that the New Zealand economy is performing much better than expected as the unemployment rate declined to 4% in the second quarter, smashing the consensus estimate of a 5.8% jobless rate.

With the jobless rate back at pre-crisis levels and employment only falling 0.4% in the three months through June – significantly less than the expected 2% decline – the economic outlook for the island-nation appears to be trending in the right direction.

Having said that, much will depend on local Covid-19 developments as a cluster of cases in New Zealand’s largest city threatens to halt the nascent economic recovery.

New Zealand Unemployment Rate (1985 – 2020)

New Zealand Dollar Plunges As RBNZ Boosts Large-Scale Asset Purchase Program

Source – TradingEconomics

Covid-19 Infections Force the Imposition of Lockdown Measures

New Zealand’s dream run of 102 days coronavirus-free came to an end overnight, with Prime Minister Jacinda Ardern confirming four infections had been discovered in Auckland, the nation’s largest city.

What’s troubling about the recent cluster is that the original source has yet to be identified, which means that “there are almost certainly other active cases of Covid-19 present in Auckland at the moment [and] there is also a chance the disease will have spread to other parts of the country” according to University of Auckland Professor Shaun Hendy.

Although the four cases had come from one household, Arden requested that “people in Auckland stay home to stop the spread’ and moved to impose ‘stage-three’ restrictions in New Zealand’s largest city for the next three days. The rest of the nation is shifting to ‘stage-two’ measures, which “means social distancing applies and mass gathering will need to be limited to 100 people”.

New Zealand Dollar Plunges As RBNZ Boosts Large-Scale Asset Purchase Program

Source – New Zealand Government

Given the limited nature of the restrictions, the overall effect on the economy and in turn the New Zealand Dollar may remain relatively minimal.

However, a ramp-up in testing may lead to increasing case numbers and would probably result in the tightening of restrictive measures.

Therefore, investors should continue to monitor local health developments as the threat of a ‘second wave’ of Covid-19 infections may hamper NZD against its major counterparts and result in the RBNZ resorting to alternative monetary policy tools.

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES