The Kiwi steady around 0.65 after a 5% rally last week

Daily Currency Update

The New Zealand Dollar continued its recent run of good form, appreciating 0.7% on Friday to open this morning at 0.6507. The Kiwi enjoyed a stellar week, rising more than 5% and hitting a 5 month high.
Buoyed by positive risk sentiment, the New Zealand Dollar, considered a proxy for global risk sentiment saw its fortunes rise as global investors become more optimistic about a quick recovery from COVID-19. Nevertheless, Friday’s gains were somewhat tempered during the American trading session when the US Dollar enjoyed a slight reprieve from the heavy selling seen during the week. Driven by US unemployment figures, the Greenback saw a slight gain on the US Dollar index as unemployment came in at 13.3%, a vast improvement on the 19.4% expected.
Nevertheless, the Kiwi also finds itself well supported by Chinese Trade Balance data released on Sunday which saw China’s exports in May fall a less-than-expected 3.3% compared with a year earlier. Chinese Imports however were 16.7% down over the same period.
Moving into a new week, the Kiwi looks to continue to benefit from the shift in optimistic risk sentiment with relatively positive data points seen in China and the United States. Nevertheless, technicals point to an overbought Kiwi and the New Zealand Dollar is particularly susceptible to deteriorating Sino-American relations.