NZD / USD drops to 0.6935 after hitting long-term highs at 0.6950

• NZD / USD appreciates for the third consecutive week to hit a 23-month high at 0.6950.
• Kiwifruit is trading higher as risk appetite returns.
• NZD / USD is biased to the upside and could break above 0.6945 – Credit Suisse.

The New Zealand dollar it is retreating in late Friday trading after posting a fresh 23-month high at 0.6950. The pair has fallen back to the 0.6935 area, rising 0.36% and on track to complete a three-week rally.

The kiwi rises in a risky market

The risk-sensitive kiwi resumed its uptrend on Friday, fueled by positive market sentiment as investors shifted their focus from rising COVID-19 cases to promising news about vaccine progress.

Pharmaceutical giant Pfizer today announced a plan to apply for an emergency use authorization for its vaccine in the US, a major milestone that has raised hopes that the cure for the pandemic will be available in late December or early January. .

Vaccine news and market speculation about the resumption of talks between Democrats and Republicans to pass a stimulus package against the coronavirus in the US have fueled market optimism, weighing on the dollar from safe haven. The DXY fell to test 10-day lows at 92.15 before rebounding during US trading hours and turning positive on the day.

NZD / USD: An Eventual Breakout Of 0.6945 Is On The Cards – Credit Suisse

According to Credit Suisse’s currency analysis team, the risk is on the upside and a rally beyond 0.6950 should not be ruled out: “Beyond 0.6945 we would see the December 2018 high at 0.6970 below, where we would expect to see another pause. Elimination here in due time should subsequently see an acceleration of the bullish momentum, to the June 2018 high at 0.7054 / 60 and eventually 0.7111 / 58 ”.