NZ dollar rises as greenback falters; Covid spread shrugged off

The kiwi was trading at 65.83 US cents at 5pm. Photo / Getty Images

The New Zealand dollar ground higher, driven mainly by US dollar weakness as global markets continue to shrug off continuing bad news of spreading Covid-19 infections.

The kiwi was trading at 65.83 US cents at 5pm in Wellington from 65.40 cents at the same time yesterday while the trade-weighted index was at 72.37 from 72.21.

See live rates for the NZ-US $ below. Click for more information:

"We're just seeing broad US dollar weakness right across the board. It's not specific to the kiwi and the Aussie. It's more the absence of risk-off aversion," said Mitchell McIntyre, a dealer at XE.

Even though the number of Covid-19 cases is increasing, particularly in the US, "for the moment, the market seems to be shrugging off all the bad news," McIntyre said.

Across the Tasman, Victoria recorded 165 new Covid-19 cases today, up from 134 on Wednesday but down from Tuesday's record 191.

The Victorian government ordered the citizens of greater Melbourne back into lockdown yesterday for six weeks to try to stamp out the outbreak.

While cases of infection are low to non-existent in Australia's other states, Prime Minister Scott Morrison warned their residents not to become complacent.

However, Australia looks like a model of control compared to the US where new infections passed 61,000 and hit a fresh record on Wednesday.

Daily deaths in the US had been tapering off from a peak in April but are now starting to track higher again.

At home, NZ recorded three new infections today, but, as has been the case for months, they were all travellers returning to NZ and already in quarantine.

The domestic currency appears to be testing a key resistance level near 66 US cents but the big question is whether it will be able to sustain a higher level, McIntyre said.

Its near-term future will likely depend on how US share markets perform tonight and, at the moment, the key S&P 500, Dow Jones Industrial Average and Nasdaq indices futures are barely positive.

The NZ dollar was trading at 94.15 Australian cents from 94.24 cents at 5pm yesterday, at 52.11 British pence from 52.09 pence, at 57.92 euro cents from 57.99 cents, at 70.61 yen from 70.31 yen and at 4.5969 Chinese yuan from 4.5903 yuan.

The bid price on the two-year swap was at 0.2100 per cent from 0.2030 per cent, while the 10-year swap was at 0.7550 per cent from 0.7430 per cent yesterday.