Kiwi eases as US Covid crisis rattles traders

The New Zealand dollar was slightly weaker, remaining in the range it has been in for more than a week, as traders eye the worsening coronavirus situation in the United States.

The kiwi was trading at US65.42c at 5pm yesterday from US65.65c at the same time on Thursday and US65.79c in New York a week ago. The trade-weighted index was at 72.06 from 72.22.

The US reported more than 73,000 new Covid-19 cases on Thursday — Reuters is reporting its own tally of the number is more than 77,000 — and the number of deaths is also starting to tick up again.

“The market’s been hanging its hat on hopes of a vaccine” and trying to turn a blind eye to the coronavirus news, said Mike Houlahan, a dealer at XE.

“The harsh reality” of the worsening crisis in the US will put a lid on such hopes, unless something more concrete than earlystage tests is announced, he said.

California and a number of other states are partially shutting down again to try to halt the spread of the virus and to stop their medical capacity being exceeded.

Houlahan said the market is also watching for developments in US-China relations.

As for the local currency’s outlook, it has fallen in August in nine of the past 10 years, Houlahan said.

August is when many in the Northern Hemisphere take their summer holidays. It also marks the end of NZ’s export season.

The NZ dollar was trading at A93.67c from A93.82c at 5pm on Thursday, at 52.08 British pence from 52.24 pence, at 57.47 euro cents from €57.55 cents and at 4.5804 Chinese yuan from 4.5904 yuan. It was unchanged at 70.13 yen.