The New Zealand dollar's rally to a six-month high this week may be over as traders look to the looming recession that's set to drag into next year.
The kiwi traded at 66.24 US cents at 5pm in Wellington from 66.74 cents yesterday, trimming its likely gain for the week to 0.8 per cent. The trade-weighted index was at 72.53 from 72.95 yesterday.
The local currency tried to break above 67 US cents this week as relatively upbeat US corporate earnings and some promising trials of covid-19 vaccines gave investors optimism that the pandemic might be manageable and short-lived.
However, heightened tensions between the US and China kept investors uneasy about the global outlook. Weaker than expected US jobs data and mixed earnings weighed on Wall Street and reminded investors that the pandemic's impact may drag on for longer and be harsher than they had hoped.