New Zealand Dollar Rates Gain Despite Covid-19 Fears As Currency Rivals Plummet – Exchange Rates UK

Developments in the coronavirus, Covid-19, have been dominating the market this week and have largely led to broad losses in trade-correlated New Zealand Dollar exchange rates.

However, even as those concerns persist the relatively risky trade-correlated currency is seeing stronger performance today, as its rival currencies slumped. The New Zealand Dollar was also helped by the latest New Zealand trade data.

Due to coronavirus developments having an impact on all sorts of currencies, trade-correlated NZD exchange rates have been more mixed this week, following last week’s losses.

For example, the Pound (GBP) has been limply driven by rival strength for most of the week too. GBP/NZD climbed on coronavirus concerns for most of the week, until this morning when rising Brexit fears throttled the Pound lower. GBP/NZD currently trends below the week’s opening levels of 2.0404, in the region of 2.0369.

The US Dollar (USD) has been a little stronger, gaining for most of the week on safe haven demand. However, USD/NZD has fallen back from this morning’s 2020 high of 1.5909 due to Federal Reserve rate cut bets hitting the US Dollar lower. At the time of writing, USD/NZD still trends a little higher than the week’s opening levels in the region of 1.5834.

The New Zealand Dollar is finally seeing some more steady performance today, following weeks of losses on coronavirus concerns.

The coronavirus Covid-19 has been spreading from China in recent months, and the outbreak has caused concerns that it could have a notable downside impact on the global economy.

As the outbreak originated from China, currencies with correlations to trade, especially trade with China, were worst hit. This included the New Zealand Dollar.

However, China and trade-correlated currencies have seen slightly stronger demand this week. This is because the coronavirus is showing more signs of spreading outside China, causing concerns that this may be more than a China-specific problem.

As a result, while the coronavirus remains a big downside factor in the New Zealand Dollar’s appeal, rival currencies have also been plummeting on coronavirus jitters now.

As the US Dollar (USD) slumps on rising Federal Reserve interest rate cut bets, riskier currencies that often weaken from USD strength like the NZD have been climbing.

The New Zealand Dollar is also benefitting from today’s stronger than expected New Zealand balance report. Exports and the overall trade balance were higher than some analysts forecast.

New Zealand Dollar (NZD) Exchange Rate Forecast: Coronavirus Remains the Focus

While the New Zealand Dollar is benefitting from rivals being hit lower by virus jitters today, the outlook for the ‘Kiwi’ is still fairly gloomy.

With the impact of the coronavirus only looking likely to rise, analysts predict there will only be further weakness ahead for currencies correlated to risk and trade like the New Zealand Dollar.

According to New Zealand Finance Minister Grant Robertson:

‘The best-case scenario was that the containment option would work. That appears to be working in China but it’s now becoming much less likely

That basically means, in terms of New Zealand, we’re looking at impacts right through 2020,’

Next week’s New Zealand economic calendar is looking fairly quiet, with only building permits stats due for publication on Wednesday.

As a result, developments in trade and the Covid-19 outbreak will remain the key focus for New Zealand Dollar exchange rates, with the currency also likely to be influenced by sharp movements in rivals.