​NZD Uptrend May End amid Greater Uncertainties

WikiFX News (9 Dec.) - NZD/USD has gained over 7% since November. The pair climbed to as high as 0.7104 in early December, a record high ever reached in the past 20 months. However, NZD could find pressure from recent market uncertainties.

NZD/USD has registered its fifth week of gains in a row since November, attributed to the weak dollar. Besides, the roll-out plan of the Covid-19 vaccine has lifted markets' expectations on the global economic recovery, strongly supporting NZD.

New Zealand Finance Minister Grant Robertson has asked the central bank to consider factoring house prices as part of its monetary policy remit, boosting the local dollar on market bets of less stimulus. However, a rapidly rising exchange rate seems to encumber the recovery of export-oriented New Zealand.

More importantly, uncertainties about the US stimulus and Brexit are still looming over the market, amid which negative news will pull back the DXY and drag down the risk-sensitive NZD. A breach below 0.7000 is on the cards for the pair, with 0.6940 or even 0.6900 the next barriers to test.

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Chart: Trend of NZD/USD