The New Zealand dollar is trading in negative territory in the Monday session. Currently, NZD/USD is trading at 0.7137, down 0.29% on the day.
New Zealand dollar on the defensive
The New Zealand dollar remains under pressure from its US counterpart. NZD has looked dreadful in the month of March, registering losses of 1.26 per cent. On Friday, the currency briefly fell below the round 71 level, the first time that has occurred since mid-January. If the downturn continues, we could see NZD in 70-territory later this week.
The primary drive behind the attractiveness of the US dollar has been the recent rise in US Treasury yields. The 10-year bond climbed to 1.60% earlier on Monday, while 30-year bonds rose to 2.31%. This was in response to the Senate passing a massive 1.9 trillion dollar stimulus package on Saturday. The Democrats, who control both houses of Congress, plan to send the bill to President Biden for his signature by March 14.
The US dollar received a boost on Friday, after an outstanding nonfarm payrolls report for February. The US economy created 379 thousand new jobs, easily surpassing the forecast of 197 thousand. With more people working, we can expect consumer spending and other key indicators to point upwards, as the economic recovery continues to gain traction.
The New Zealand economy continues to gather steam, as global demand for the country’s exports has increased. We’ll get a look at Manufacturing Sales (21:45 GMT) for Q4 of 2020. The third-quarter read came in at 10%, but this came after a sharp drop of 11.9% in the previous release. Business confidence has rebounded, with the ANZ Business Confidence index rising to 11.8, its first gain after an extended streak of declines. The March reading will be released early on Tuesday (00:00 GMT).
- There is resistance at 0.7280, followed by resistance at 0.7398
- The first level of support is 0.7072, followed by a support level at 0.6982