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NZD/USD poised to attack 0.67 on Fonterra news

FXStreet (Mumbai) - The NZD bears regained control in the early European trades, now pushing NZD/USD towards fresh five-day lows just ahead of 0.67 barrier.

NZD/USD rejected at 10-DMA, drops sharply

Currently, the NZD/USD pair drops -0.58% to fresh five day lows of 0.6713, failing to resisting 0.6750 – psychological levels. The Kiwi dropped nearly 40 pips in a knee-jerk sell-off in reaction to the news that Fitch lowered the NZ dairy giant, Fonterra’s credit rating to A- from A+, while keeping the outlook ‘stable’.

The latest news added to the negative sentiment around the New Zealand dollar, further accentuating the downside, after the Kiwi was heavily offered on Tuesday following poor Fonterra auction results.

The GDT index fell 3.1% versus a 9.9% rise in the previous fortnight, while whole-milk powder - the most crucial commodity for New Zealand - tumbled 4.6% to $2,694.

Later in the day, markets will continue to digest the latest update while also monitoring the development on the global equities.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6760 (Today’s High), above which it could extend gains to 0.6808 (hourly 100-SMA) levels. To the downside immediate support might be located at 0.6630 (20-DMA) below that 0.6600 (round number).

Fitch lowers Fonterra’s credit rating, outlook stable

The rating agency Fitch lowered Fonterra’s senior unsecured rating and long-term issuer default rating to A from AA-.
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