Bloomfield Outlines Options Before Alert Level Review

Positive risk sentiment lent support to NZD/USD on Wednesday, helping the pair extend its winning streak to three days in a row and allowing it to attack the 50-DMA. In New Zealand, a round of hawkish RBNZ speak which did the rounds Tuesday was weighed against updates on the local Covid-19 situation.

• The government will review Covid-19 alert levels on Friday, but Director-General of Health Bloomfield does not expect easing lockdown settings outside of Auckland to anything lower than level 3. However, officials are looking into options such as different alert levels between the North and South islands or setting up an "internal boundary" in the Northern Island, possibly around Auckland. The Director-General told TVNZ this morning that "there could be another big number [of infections]" today as the Delta variant is like a "whole new virus", but cases are expected to peak over the "next day or two".
• Going forward, focus turns to monthly ANZ Consumer Confidence, due Friday. Meanwhile, any fresh developments on the Covid-19 front will provide interest.
• NZD/USD trades at $0.6972, little changed on the day. A clean break above the 50-DMA at $0.6985 would encourage bulls to take aim at Aug 17 high of $0.7029. Conversely, a pullback under Aug 20 low of $0.6805 would give bears some fresh momentum.