On Thursday (27 / February), the New Zealand Statistics Bureau published data on Business Confidence which plummeted deeper. No half-hearted, the data which is very directly related to the outlook for New Zeland's economy fell from the level of -13.2 to -19.4 in February.
Data on business confidence that continues to decline in the negative zone reflects that New Zealand's business and investment pessimism is getting stronger, away from the optimistic area that is confirmed if the index is above zero.
The decline was largely triggered by the deterioration of several sub-indicators such as employment, investment, company profits, and exports due to the widespread outbreak of the Coronavirus which is now increasingly global. On the other hand, commercial construction sub-indicators and credit availability are still increasing.
At present, analysts argue that the spread of the Coronavirus outside of China is even faster than the previous spread when the virus was still inside China in January. In fact, the virus that causes symptoms such as acute pneumonia is confirmed to have spread to the land of Uncle Sam since a few weeks ago.
NZD / USD Movement Pressured Due to Corona Virus
In a recent statement, President Trump said that the US government would prepare quarantine programs more broadly in various cities in the US. Not only the United States, other regions such as Saudi Arabia have also taken anticipatory measures, namely by suspending Umrah visas from dozens of world countries including Indonesia. Furthermore, the United Arab Emirates has banned Emirates and Etihad airlines from flying to Iran and the East Asian region.
The worsening New Zealand fundamental data and risk-off sentiment due to fears of the Coronavirus further pressured NZD / USD movements in the Asian trading session this morning. When the news was written, the NZD / USD pair was trading in the range of 0.6290, near the lowest level since October 2019.
The United States and Japan have issued a "travel warning" not to take trips to China amid the rapid spread of the coronavirus. While the World Health Organization (WHO) declared a coronavirus epidemic novel is now in emergency status and is a worldwide concern. The decision was taken at a meeting held in Geneva, Switzerland.
The number of deaths from this deadly respiratory virus has now reached 213 people and the number of infected as many as 9,692 people and has spread to 18 countries in the world.
NZD / USD Failed to Recover
Asian markets are trying to recover thinly, following in the footsteps of gains from the S&P 500 futures and a solid rebound from US treasury yields. As a consequence, USD / JPY rose to 109.14 from a low of 108.88.
Most Asian currencies stall their decline in moderation for several months even though it hasn't ended yet. The Aussie jumps to 0.6729 while NZD / USD perched below 0.6500. The Chinese Yuan is struggling to continue its recovery against the US dollar. EUR / USD is trading under pressure but managed to hold at 1.1000 while GBP / USD is consolidating gains caused by the BOE decision, around the 1.31 area.
Oil experienced a 2% rebound due to the reconciliation tone from WHO, with traders reassessing the impact on demand for oil and its products.
The US Dollar rally against its main competitors over the past two days has been hindered after the US House of Representatives voted to dismiss President Trump on two counts. Trump's dismissal created political uncertainty in the United States and raised demand for safe-haven assets such as gold and the Japanese yen.
Throughout the forex sphere in the G10, the Aussie rallied and rose almost 30 pips after the release of good Australian employment data. While NZD / USD failed to take advantage of New Zealand's growth figures that came out better.
