The Kiwi Dollar continued to lose significant ground against the USD as markets continued to tumble across the world. Equity prices have plunged again with the S&P500 down almost 10%, while oil prices dropped by around 20%. Traders are struggling to sort out the various monetary and fiscal moves by global central banks and governments to stabilize economies ahead of an almost certain global recession. The US Dollar has been the main benefactor as investors liquidate other assets and park funds in the relative safety of the Greenback.
NZD at 10 Year Low
The New Zealand Dollar has fallen to its lowest level vs the USD since 2009. It is also down sharply overnight vs the EUR and JPY, but has continued to strengthen vs the AUD. NZD/AUD briefly traded above the usually elusive parity level before falling back towards 99 cents. NZD/GBP is also higher this morning as the British Pound plummeted vs the USD, at one stage by up to 5%, and to its lowest level since 1985!
Oil Exposed Currencies Plummet
Oil prices dropped this morning towards $20 a barrel amid deepening coronavirus fears and after reports showed that Saudi Arabia looks to boost oil exports to a record 10 million barrels a day, as the price war between top OPEC oil producers intensifies. Currencies exposed to oil prices have continued to run into heavy selling with the Norwegian Kroner down 8%, and the Australian Dollar continuing to hit multi-year lows.
The Day Ahead
More uncertainty and more big moves across markets expected. NZ GDP figures for Q4 are due later this morning, but the numbers are largely irrelevant given the current global meltdown. Coronavirus news and developments will continue to be the only big influence on markets.
© Copyright - EncoreFX, 2018.The information in this post is provided for general information purposes only and has been prepared without taking into account any person’s objectives, financial situation or needs and, accordingly, it does not constitute personalised financial advice under the Financial Advisers Act 2008, nor does it constitute advice of a legal, tax, accounting or other nature to any person. Before acquiring any financial services or products from EncoreFX, you should consider the appropriateness of the information having regard to your own objectives, financial situation or needs. We recommend that investors seek advice from their usual adviser before taking any action. EncoreFX (NZ) Ltd is a registered Financial Services Provider (FSP 461386), and is a licensed derivatives issuer under the Financial Markets Conduct Act 2013. EncoreFX (NZ) Ltd has lodged a Product Disclosure Statement (PDS) for each of our derivatives with the Registrar on 21-Dec-2016. A copy of each PDS is available from us or from the Registrar at www.business.govt.nz/disclose.