The New Zealand dollar continues to push higher against the sagging US dollar. NZD/USD is trading at 0.6783 in the European session, up 0.45% on the day. On the fundamental front, today’s highlight is US Nonfarm payrolls, which is projected to dip to 595 thousand, down from 661 thousand beforehand.
It has been a superb week for the New Zealand dollar, which has gained 2.63% per cent, its best week since August. Earlier in the day, NZD/USD briefly broke above the 0.6800 level, for the first time since April 2019.
NZ dollar flies against the sagging greenback
The US dollar has suffered a miserable week, and the New Zealand dollar has taken full advantage, recording gains every day this week. The upswing has been largely a result of the US election, which has resulted in significant volatility in the currency markets. On Tuesday, market movement was fueled by expectations of a blue wave, meaning that the Democrats were projected to win the presidency and both houses of Congress. This resulted in a buy-everything mood, which saw the kiwi and other commodity-based currencies record sharp gains against the US dollar.
The expected Democrat blue wave turned into a slow trickle, as the race between Donald Trump and Joe Biden has been neck-and neck and votes are still being counted on Friday, three days after the election. This stunning turn of events triggered sharp volatility from NZD/USD on Wednesday, but the currency managed to end the day in positive territory. The counting of votes has been agonizingly slow, but with Biden expected to win the required 270 electoral ballots, the kiwi continues to fly.
In New Zealand, there was positive news on the inflation front, as Inflation Expectations in Q3 gained 1.53 per cent, an improvement from 1.43% in the second quarter. This points to stronger economic activity and has helped boost the New Zealand dollar on Friday.
- 0.6807 is a weak resistance line. This is followed by resistance at 0.6842
- We find support at 0.6708. Below, there is support at 0.6644
- NZD/USD punched above the 50-day MA line early in the week and has continued to head higher
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