The New Zealand dollar dropped to new multi-year lows against other most-traded currencies today. Losses were across the board as the kiwi was falling even against other vulnerable commodity currencies. Even the GDP report that came out in line with expectations was unable to help the New Zealand currency.
Statistics New Zealand reported that gross domestic product rose by 0.5% in the December 2019 quarter from the previous three months, matching analysts’ forecasts exactly. While it was a slowdown from the previous quarter’s 0.8% rate of growth, the reading was not bad by itself. The problem is that the data is delayed, showing the state of the economy before the widespread COVID-19 pandemic. Therefore, it is of limited interest to market participants.
The week started poorly for the kiwi as the Reserve Bank of New Zealand announced an emergency interest rate cut, sending the currency down. While the announcement of a fund injection to the economy by the government helped the NZ dollar a bit, the rally was extremely short-lived, and the currency quickly resumed its race to the downside. It looks like whatever measures governments and central banks of different countries around the world take are not enough to calm down panic on markets, and investors continue damping any liquid assets in favor of safer ones. The currency of New Zealand, being linked to commodities, is definitely not considered safe. Admittedly, prices for some raw materials managed to log decent gains today. But that hardly provided any help to commodity currencies.
NZD/USD dropped from 0.5738 to 0.5663 as of 10:18 GMT today, and its daily low of 0.5469 was the lowest since March 2009. EUR/NZD traded at about 1.9073 after opening at 1.9011 and rising to the session high of 1.9913 — the highest level since February 2010. NZD/JPY slipped from 61.96 to 61.83, touching the low of 59.44 intraday — the lowest since June 2012.
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