NZ dollar eases amid rising covid-19 cases in Beijing, US

Director General of Health Dr Ashley Bloomfield during his media briefing, after it was announced NZ has two more confirmed cases of Covid-19

The New Zealand dollar weakened amid worsening news on the resurgence of covid-19 in Beijing and a number of major US states.

The kiwi was trading at 64.44 US cents at 5pm in Wellington from 64.83 cents at the same time yesterday. The trade-weighted index was at 71.47 from 71.59.

Beijing has closed schools, locked down 27 neighbourhoods and cancelled about 60 per cent of flights as it battles to contain the latest outbreak.

The city reported 31 new cases of infection today in the outbreak linked to a wholesale food market.

Cases have also surged in more than 20 US states – Texas reported 4,413 new cases on Tuesday, up from less than half that on Monday.

"The biggest one I'm watching is the resurgence in Beijing," said Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia, adding that the surge in cases in some US states isn't helping either.

"The kiwi's gone sideways on the data – there's been late selling of kiwi dollars in late Asia, early London for the last few days," Kelleher said.

The news that two women travelling to New Zealand from Britain to a parent's funeral, and who have since tested positive for covid-19, had been allowed out of quarantine and were reported to have been in contact with about 320 other people hasn't helped either.

"People are taking notice of it," Kelleher said.

The rising infections overshadowed earlier news that a cheap steroid has proved effective in saving the lives of about a third of those infected with covid-19 who have been put on ventilators

Other geopolitical tensions bubbling in the background include heightened tensions between North and South Korea after the north blew up a meeting place on the border and border clashes between India and China.

"Globally, there's a fair bit to look out for," Kelleher said.

The New Zealand dollar was trading at 93.76 Australian cents from 93.23 late yesterday, at 51.31 British pence from 51.18 pence, at 57.18 euro cents from 57.19 cents, at 69.09 yen from 69.69 yen and 4.5696 Chinese yuan from 4.5859 yuan.

The bid price on the two-year swap was at 0.2230 per cent from 0.2425 per cent, while the 10-year swap was at 0.7530 per cent from 0.7675 per cent yesterday.