NZD outperforms major counterparts as restrictions continue to ease

Daily Currency Update

NZD - New Zealand Dollar

The New Zealand dollar outperformed major counterparts Monday up almost three quarters of a percent on last weeks close thanks to a positive shift in the underlying risk narrative. With little of note on the macroeconomic ticket investors seem driven by an improvement across broader risk flows. Last weeks dovish central bank shift has helped elevate equities and ensure the recent risk on run is sustained, spilling over into currency markets. Commodity currencies were the primary beneficiaries on Monday with the NZD added an additional boost on news COVID restrictions across Auckland will be eased on Wednesday as the country tries to transition away from a COVID zero policy and ramp up vaccination rates. Having opened at 0.7105 the NZD marked intraday highs at 0.7170 and extended back above 0.9650 against the AUD, tested 0.62 Euro and briefly edged above 0.53 against the Pound.

The NZD remains vulnerable to broader fluctuations in the risk narrative and the ongoing impact Of Covid restrictions. NZD remains some 6-9 months behind the rest of the world in its plan to live with the COVID virus and the domestic economies ability to respond to the ongoing impacts of the pandemic will cast a pall over the economy through the months ahead.