The New Zealand dollar made further gains, driven by Wall Street euphoria over the US government's US$2 trillion ($3.3t) stimulus package, but futures pricing suggests US equity gains may be trimmed and the kiwi's with them.

Two days into New Zealand's lockdown to try to prevent the spread of Covid-19, the kiwi rose as high as 60.14 US cents. It was trading at 59.90 cents at 5pm in Wellington from 58.33 cents late yesterday and compared with 57 cents in New York last Friday. The trade-weighted index was at 68.44 from 67.68.

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"Equities markets are driving currencies," said Martin Rudings, an adviser at OMF.

But equities traders in New York "are living in a dream world. They think the stimulus is going to save them from the virus," he said.


Early today, the US became the country with the largest number of coronavirus cases, overtaking China, where the virus originated, and Italy, which has been devastated by the disease.

The US now has 85,594 people counted as infected, up from 68,211 yesterday, and 1,300 of its citizens have died. China's number of reported infected stands at 81,340 and Italy's at 80,589 with deaths of 3,292 and 8,215 respectively.

New Zealand's cases jumped by 85 to 368 and nobody has died of it here yet. That's 76 cases per million people compared with the US rate at 259 per million and Italy at 1,333.

Rudings said reports that US unemployment claims jumped to a record 3.3 million last week, from 281,000 the previous week and easily ahead of the previous record of 695,000 set in October 1982, only served to fuel market expectations that the Federal Reserve would pump more money into the economy.

"They've already fired a bazooka-load at it," Rudings said, adding that expectations that the US economy can revert to normal in a couple of weeks are unrealistic.

"It's a little bit too early in the virus scenario to start talking about the other end of the tunnel."

US equities futures are pointing to a down day on Wall Street later today. The broad measure of US stocks, the S&P 500 Index, has gained 18.6 per cent so far this week but shortly before 5pm in Wellington, the futures were down 1.2 per cent.

The New Zealand dollar was trading at 98.04 Australian cents from 98.58 cents at 5pm yesterday. It was at 48.77 British pence from 49.15, at 54.08 euro cents from 53.44, at 65 yen from 64.61 and at 4.2272 Chinese yuan from 4.1470.


The bid price on the two-year swap rate closed at 0.5300 per cent from 0.5375 yesterday while 10-year swaps were at 0.9570 per cent from 1.0100 per cent.