New Zealand dollar crashes below 0.66 and eyes a shift back toward 0.64

Daily Currency Update

The New Zealand Dollar was one of the worst performers through trade on Wednesday, crashing below 0.66 to touch intraday lows at 0.6540. Weaker risk sentiment drove direction as markets largely ignored the RBNZ policy update. The central bank maintained its current forward guidance and made few changes to its QE program. While the bank affirmed its commitment to additional policy tools to try and drive economic growth it offered little to suggest the timing of a shift to negative interest rates will be brought forward, preferring to adopt increased lending programs in a bit to reduce bank funding costs and stimulate lending through the back half of 2020.
The domestic economic outlook remains soft and don’t anticipate any significant change through Q4 given the uncertainty surrounding souring global forecasts. The NZD remains vulnerable to ongoing corrections in risk demand and while there is some mid-level support at 0.6520 a break below this handle could prompt a correction back toward 0.64.
Attentions today remain with recent themes as sentiment continues to dominate direction