- Wall Street posted the biggest daily loss since the 1987 crash.
- US dollar jumped across the board, NZD/USD dropped 2.30%
The NZD/USD tumbled top 0.6087 reaching the lowest intraday level since Monday. It then bounced modestly and it ended around 0.6120, the weakest close since 2009.
Another dramatic sell-off in Wall Street, even worst than Monday’s weighed on commodity and emerging market currencies. The greenback was the best performer, boosted by intense risk aversion and higher US yields.
The Dow Jones lost almost 10% and the S&P 500 9.5%. The wild ride in markets started after US President Trump imposed a 30-day travel ban from Europe. Now events, sports tournaments, meetings, travels, etcetera are being canceled in all continents. The economic outlook worsened dramatically over the last few days, triggering panic among investors.
“A health crisis has morphed quickly into the most synchronised economic shock imaginable, with financial markets now battling it out for the headlines as well. Overnight the ECB stepped up purchases, the US Fed injected sizeable liquidity, and the market is also expecting the FOMC to deliver the remaining 100bp of cuts in short order. Here, the RBNZ has argued that they have plenty of time to think through their response, but with developments rapidly escalating on the global health, economic and financial fronts simultaneously, that seems optimistic”, explained ANZ analysts.
Volatility is likely to remain at extreme levels, favoring sharp moves in NZD/USD either down or up. On the flip side, the 0.6100 is the immediate support followed by 0.6040. On the upside, the 0.6180/0.6200 is the resistance band to break.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD looks at the RBA for near-term direction
AUD/USD resumed its rebound and briefly surpassed the 0.6600 barrier on the back of the renewed and marked resurgence of the downward bias in the US Dollar. Investors, in the meantime, expect the RBA to keep its rates unchanged on Tuesday.
EUR/USD: Price action hinges on the US election and the Fed
EUR/USD managed to trespass the key 1.0900 hurdle and print new highs following the Greenback’s offered stance as investors warmed up for the US election and the FOMC event later in the week.
Gold trades around $2,730
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
RBA widely expected to keep interest rate unchanged amid persisting price pressures
Australia’s benchmark interest rate is set to stay unchanged at 4.35% in November. The focus remains on Reserve Bank of Australia Governor Michele Bullock’s comments and updated economic forecasts. The Australian Dollar could wilt if RBA Governor Bullock ramps up bets for a December rate cut.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.