NZ Dollar Drops Amid China Worries
The NZ dollar fell against its major counterparts in the Asian
session on Tuesday amid rising risk aversion, as the European Union
imposed sanctions on Chinese officials over human rights violations
Beijing hit back immediately with punitive measures against
several EU officials and entities after coordinated sanctions by
western countries over Xinjiang abuses.
The New Zealand government announced a raft of measures to curb
housing prices, quashing hopes of a rate hike by the Reserve Bank
of New Zealand.
The government will establish $3.8 billion fund to accelerate
housing supply over the short to medium term.
The income caps for first home buyers to receive government
support would be increased to $95,000 from $85,000 for a single
buyer, and to $150,000 from $130,000 for two or more buyers from
The bright-line test would be extended from five to 10 years
with exemptions to incentive new builds.
The kiwi depreciated to a 4-week low of 76.85 against the yen
and a 3-month low of 0.7069 against the greenback, off its early
highs of 77.99 and 0.7165, respectively. If the kiwi extends
decline, 74.00 and 0.68 are possibly seen as its next support
levels against the yen and the greenback, respectively.
The kiwi reversed from its early highs of 1.6641 against the
euro and 1.0800 against the aussie, dropping to a 1-1/2-month low
of 1.6866 and a 5-1/2-month low of 1.0882, respectively. The next
possible support for the kiwi is seen around 1.72 against the euro
and 1.10 against the aussie.
Looking ahead, U.S. new home sales for February are scheduled
for release in the New York session.
At 10:00 am ET, Federal Reserve Chair Jerome Powell will testify
before the House Financial Services Committee on the CARES Act,
along with Treasury Secretary Janet Yellen, via satellite.