The New Zealand dollar firmed but remains within its recent range as the market awaited further developments concerning the coronavirus crisis. The number of people that have been reported to have been infected with the COVID-19 virus is approaching 95,000 in 84 different countries, with the death tally at around 3,285 for known deaths. Another 306 infections and 31 deaths were reported in the past day, which has kept the pressure on the global economy as well as ensured the fears surrounding the virus remain high. The kiwi was trading at 62.97 US cents from 62.75 cents at the same time yesterday and the NZD/GBP exchange rate currently sits at around the 0.49 level, with little in the way to boost the upside to end the week.
NZ outlook clouded as economy waits for further developments
With only negative news filling the headlines, the NZ dollar continues to remain under heavy pressure as the market’s risk sentiment shows no sign of easing up. with the ongoing pressure, the outlook for the New Zealand economy is looking to turn sour. Speaking about the outlook, Martin Rudings at OMF noted that “We’re in a bit of a holding pattern”, further stating that NZ’s future economic data is likely to take a hit as a result of the recent coronavirus crisis. The full impact of the virus’ interruption to global economies still hasn’t been observed by the market as the virus is still ongoing. But the market is expecting downturns across the board as a direct result of the coronavirus’ interruptions to daily life. Rudings also mentioned that there is to be quite a lot of collateral damage to growth and trade which is still yet to come out, suggesting that he thinks this will not be a recipe for buying the Kiwi currency.
NZ discusses an action plan for COVID-19 virus containment
Fraser Whineray, chair of Prime Minister Jacinda Ardern’s Business Advisory Council, today said the big end of town was well prepared to deal with the virus. He noted that the council spent 50 minutes of a two-and-a-half-hour meeting with Ardern today discussing the coronavirus outbreak in which New Zealand has recorded three cases so far. Despite the number of cases still being in single figures, NZD has been one of the most impacted currencies due to its risk-correlation as well as its significant trading links with China – where the virus originated.
Ardern has urged small and medium-sized businesses to talk proactively with their banks about their immediate cash requirements. Asked whether the government would bring forward infrastructure products to stimulate the economy, Ardern said front-ending the government’s “New Zealand Upgrade” programme had been incredibly helpful. “That’s $12 billion in infrastructure that we have focused on being as close to shovel ready as possible, so we’ve got a head start.”
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