Kiwi Defies Lockdown in Steady Push Toward Year-to-Date Highs

Renewed lockdowns in New Zealand haven’t broken the kiwi’s stride this month, and now investors are looking to a possible easing of restrictions to give the currency another push higher.

The cue for a further round of kiwi buying could come from Prime Minister Jacinda Ardern, who is expected to give an update on the the latest curbs on movements on Wednesday. New Zealand Covid Response Minister Chris Hipkins told reporters Tuesday there were no new community cases of Covid-19 since a snap announcement of three-day restrictions on Sunday.

The currency has already notched up a four-week winning streak. Its backers now see a fresh catalyst if the lockdown in largest city Auckland is dialed back, along with social distancing measures across the rest of the country.

Kiwi Defies Lockdown in Steady Push Toward Year-to-Date Highs

Technicals line up for the kiwi’s advance. A bullish flag is converging on a rising 50-day moving average, and momentum indicators point to further gains, with the currency still just below overbought territory. The kiwi was trading at around 72.50 U.S. cents on Tuesday.

Moreover, positioning by asset managers are also supportive, with longs bouncing 53% to 4,952 contracts as of Feb. 9 after declining for four weeks, according to the Commodity Futures Trading Commission.

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