NZD/USD consolidates gains near 20-months high at 0.6855
- NZD/USD steady above 0.6800 after hitting multi-month highs at 0.6855.
- Kiwi rallies on risk appetite amid Buden's victory and Coronavirus vaccine.
- This week, all eyes will be on the RBNZ's monetary policy decision.
The New Zealand dollar has opened the week on the same tone it finished the last one, to extended its rally from 0.6600 area to the mid-range of 0.6800 for the first time since March 2019. The pair has trimmed gains during the US trading session although it remains well above 0.6800.
Kiwi rallies on risk appetite
The NZD/USD has extended Friday’s rally amid the broad risk-on sentiment triggered by the upbeat results of Pfizer’s COVID-19 vaccine’s first tests. The announcement that the vaccine is 90% effective has boosted risk appetite, increasing demand for the risk-sensitive NZD.
Previously, the kiwi appreciated strongly late last week as the Democrat candidate, Joe Biden reached closer to the White House. Hopes of a more pro-trade approach oriented towards the normalization of US' international relations and the higher chances of a stimulus agreement have improved investor's sentiment.
The market, however, will be attentive to the outcome of the Reserve Bank f New Zealand’s monetary policy decision, due next Wednesday. The Bank is expected to keep its benchmark rate unchanged although they might prepare the path for the introduction of negative rates next year, which might trigger important price movements on NZD crosses.
Technical levels to watch