NZD Limited By Resurfacing Coronavirus

NZD/USD slide on Thursday, as the Kiwi landed at the bottom of the G10 pile. The initial hit came from RBNZ's Ha, who noted that policymakers would prefer a weaker exchange rate. The rate continued to lose altitude as White House's Kudlow warned against a rising China's influence, while the yuan weakened steadily. The Kiwi likely faced some additional pressure from concerns over the re-emergence of Covid-19 in New Zealand, with PM Ardern warning that the cluster of infections in Auckland is expected to grow.

• Stuff reported that another coronavirus case was confirmed in Tokoroa today, indicating that the pathogen has spread beyond Auckland. Elsewhere, Auckland Mayor told RNZ that he does not expect the city's alert level to drop below 3 over the next few weeks.
• At 17:30 NZST/04:30 BST, the government will announce its decision on lockdown measures. The nation is now on alert level 2, except Auckland, which is on level 3.
• In local data, NZ house sales and prices surged in July, per this morning's RBNZ release. Low lending rates likely helped boost the figures.
• Worth re-flagging MNI's interview with RBNZ's Ha, who said that the central bank will not buy foreign assets unless the FX rate is out of line with fundamentals.
• NZD/USD last at $0.6544, 3 pips worse off. A fall through Aug 12 low of $0.6525 would open up Jul 14 low of $0.6503. Bull look for a jump above $0.6599/0.6600, which capped gains over the last two days. Above there opens Aug 7 high of $0.6691.
• New Zealand's BusinessNZ M'fing PMI comes out shortly.
• Next week, New Zealand reports quarterly PPI data (Wednesday) and credit card spending (Friday).