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Kiwi’s post-RBNZ resilience starting to be challenged

NZD/USD falls by 0.5% to 0.6890 in European trading

The kiwi has put up much resilience after the RBNZ policy decision earlier but the currency is starting to wobble a little now as it slips under 0.6900 against the dollar.

While the figure level is key, there is still daily support from the 20 July low at 0.6880.

But a firm break (daily close especially) below that, and that opens up a potential fresh downside leg for the pair despite the RBNZ keeping a more optimistic outlook.

The central bank continues to maintain that the latest COVID-19 outbreak is not going to stray them away from the tightening path but that is largely contingent on how the virus situation develops in the coming days/weeks.

The latest news is that an Air New Zealand crew member has tested positive today, adding to the ten community cases (another three reported in the afternoon, adding to the seven in the morning) confirmed by the government.

Local media is also reporting that there are more than 70 bars, supermarkets, shops, eateries, and chemists linked to the latest outbreak scare. As things stand, the earliest exposure site is linked back to Auckland’s city center on 3 August.

That’s roughly a two-week gap to the reported first case yesterday.