The New Zealand dollar extended its plunge for a third session in a row on Wednesday amid elevated trade tensions and after the fall in New Zealand’s business confidence to a seven-month low in June.
The NZDUSD pair slipped to a new low of 0.6811, plummeting 0.66 percent from the session’s open. That level is the lowest since November 21, 2017.
Still, the sentiment is dominated by fears from a global trade war, where the latest escalation from Trump on China and the EU has raised expectations that global economies would united against the United States.
Yesterday, Trump endorsed restricting Chinese investments in U.S. technology and revealed that the approach would target all countries, not just China.
Hel also mentioned the government was completing a study about increasing import tariffs on cars from the European Union and suggested he would take action soon.
With threatens from the EU and China to respond to any action from Trump, the world could be on the brink of a comprehensive global trade war.
However, trade sensitive currencies, led by the Kiwi dollar, appeared to be more affected than others, where investors opted to resort to safe havens.
New Zealand ANZ business confidence recorded -39.0 in June, the lowest level in seven months, from -27.2 in May, raising expectations the Reserve Bank of New Zealand would hold its interest rates tomorrow.
Another report released today from New Zealand showed a growing trade surplus in May, but the upbeat figures failed to help the kiwi.
Against the yen, the kiwi plummeted to a four-week low of 74.78, while the AUDNZD pair rose to a peak of 1.0828.
The following NZDUSD daily chart shows the two key support and resistance levels for today.