"It's tried to push a bit higher. The market's been hanging its hat on hopes of a vaccine" and trying to turn a blind eye to the coronavirus news, said Mike Houlahan, a dealer at XE.
"The harsh reality" of the worsening crisis in the US will put a lid on such hopes, unless something more concrete than early-stage tests is announced, he said.
California and a number of other states are partially shutting down again to try to halt the spread of the virus and to stop their medical capacity being exceeded.
At the same time, Georgia's governor Brian Kemp is suing the mayor of Atlanta, Keisha Lance Bottoms, asking a judge to overturn her order that people wear masks in public. President Donald Trump is trying to force schools to reopen across America, regardless of the risks.
Houlahan said the market is also watching for developments in US-China relations.
"We all expect Trump to have a real drive at China," he said, noting that there are 109 days to go until the US presidential election.
"If he's going to have a jump at them, he probably needs to get on with it to get some political jump out of it."
As for the local currency's outlook, it has fallen in August in nine of the past 10 years, Houlahan said.
August is when many in the Northern Hemisphere take their summer holidays, making for thinner than normal markets which can exaggerate currency moves. It also marks the end of NZ's export season.
The New Zealand dollar was trading at 93.67 Australian cents from 93.82 cents at 5pm yesterday, at 52.08 British pence from 52.24 pence, at 57.47 euro cents from 57.55 cents, and at 4.5804 Chinese yuan from 4.5904 yuan. It was unchanged at 70.13 yen.
The bid price on the two-year swap rate was at 0.1950 from 0.2000 per cent while the 10-year swap was at 0.6850 per cent from 0.7150 per cent yesterday.
