- The New Zealand dollar edges higher some 0.69%.
- Positive Covid-19 news from South Africa and Pfizer’s Covid-19 treatment pill’s approval ease investors’ worries.
- US GDP rose by 2.3%, better than the 1.9% foreseen yearly base, while US Consumer Confidence improved.
The New Zealand dollar follows other risk-sensitive currencies’ footsteps, rallies during the New York session, trading at 0.6815 at the time of writing. The market sentiment was mixed earlier in the day, though improved in the last three hours.
According to a study, positive news in the coronavirus front with South Africa reporting that people infected with the Omicron variant are 80% less likely to be hospitalized. Additionally, in the last hour, the US Food and Drug Administration (FDA) approved Pfizer’s Paxlovid pill for home treatment to treat high-risk patients.
In the overnight session, the NZD/USD dipped as low as 0.6740. Then as the day progresses, it is staging a comeback, jumping 80-pips towards the daily high at 0.6818, as coronavirus positive news crosses the wires, easing investors’ worries of the possibility of a global economic slowdown.
Apart from this, the US Dollar Index, which measures the greenback’s performance against a basket of six rivals, slumps 0.40%, sitting at 96.10, clinging with its nails to the 96.00 threshold. At the same time, the US 10-year Treasury yield drops two and a half basis points, down to 1.460%.
On Wednesday, the US economic docket featured the Gross Domestic Product for the third quarter. The annual base reading came at 2.3%, higher than the 2.1% estimated, while the quarterly based, uptick to 6.0%, better than the 5.9% foreseen. Furthermore, the Conference Board reported that Consumer Confidence in December rose by 115.8, more than the 110.8 estimated. Since July, it is the best mark before the Delta wave that weakened confidence in the Q3.
Therefore, Wednesday’s NZD/USD price action has been subject mainly to market sentiment as the NZD is rallying despite the excellent results of US macroeconomic data. However, NZD/USD downside risks remain unless NZD bulls reclaim the 0.7000 figure, where it lies, the 50 and the 100-DMA.