Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

NZD/USD was trading in proximity to one-week lows on Wednesday, following its steepest single-day drop since September 23rd on Tuesday, as market sentiment took a hit after US President Trump’s decision to call off talks on fiscal stimulus with Democrat lawmakers.

Trump, who is still under treatment for COVID-19, surprised markets on Tuesday by calling off economic stimulus talks until after the presidential election on November 3rd, which heightens downside risks for the economy amid surging new coronavirus infections.

“The reaction is a type of risk-off trade to buy the dollar and the yen against other currencies,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said.

“Without additional stimulus, the U.S. economy will slow and the global economy will slow.”

Trump has just returned to the White House on Monday after three nights in hospital for coronavirus treatment. There have been opinions among medical experts that his early discharge puts his staff at risk of infection.

Meanwhile, recent polls have revealed a swing in public opinion against Trump. A Reuters/Ipsos polling from October 2nd to October 6th showed 52% of likely voters supporting Democrat Joe Biden and 40% – Trump.

As of 7:04 GMT on Wednesday NZD/USD was edging up 0.24% to trade at 0.6598, after earlier touching an intraday low of 0.6576, or a level not seen since September 30th (0.6569). The pair has dropped 0.19% so far in October, following a 1.80% slump in September, its first monthly loss since March.

On today’s economic calendar, at 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on September 15th-16th. Yesterday Federal Reserve Chair Jerome Powell said the US economy could end up into a downward spiral in case the virus spread is not effectively controlled and he also called for more economic aid.

Bond Yield Spread

The spread between 1-year New Zealand and 1-year US bond yields, which reflects the flow of funds in a short term, equaled 4.9 basis points (0.049%) as of 6:15 GMT on Wednesday, down from 6.2 basis points on October 6th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 0.6607
R1 – 0.6633
R2 – 0.6684
R3 – 0.6709
R4 – 0.6734

S1 – 0.6557
S2 – 0.6531
S3 – 0.6480
S4 – 0.6430

TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News

  • Oil weekly recap, January 20 – January 24Oil weekly recap, January 20 – January 24 West Texas Intermediate crude snapped four straight days of gains on Friday following a slide in equities on concern that growth in emerging economies will slow, reducing demand for petroleum products. The US benchmark nevertheless settled the […]
  • EUR/USD showed little reaction to German Gfk Consumer ConfidenceEUR/USD showed little reaction to German Gfk Consumer Confidence The euro was little changed against the US dollar on Tuesday, following the release of optimistic consumer confidence report from Germany, while markets remained edgy ahead of the meetings by the European Central Bank and the Federal […]
  • Newmark arranges sale of Aon Center in LANewmark arranges sale of Aon Center in LA Newmark Group Inc, a commercial real estate adviser and service provider to institutional investors, global corporations and other owners and occupiers, said that it had arranged the sale of Aon Center, a 62-storey trophy Class A office […]
  • Italy’s retail sales surprisingly shrink in AugustItaly’s retail sales surprisingly shrink in August Retail sales in Italy unexpectedly shrank in August, the latest data by the National Institute of Statistics showed.Sales dropped 0.5% from a month ago in August, while offsetting a 0.5% surge in July.In comparison, a consensus of […]
  • Gold extends losses, set for worst decline since 1981Gold extends losses, set for worst decline since 1981 Gold extended losses and fell on Tuesday, heading for the biggest decline in more than three decades and first annual drop in 13 years as investors lost faith in the metal as a store of value. Assets in the SPDR Gold Trust, the biggest […]
  • AUD/USD close to one-month highs on job outlook in AustraliaAUD/USD close to one-month highs on job outlook in Australia Australian dollar traded in proximity to highs unseen in one month against its US counterpart on Monday on prospects that jobs in Australia rose a second month in December before the official report, scheduled for release on January 16th, […]