NZD/USD: Bears eye October low of 0.6203 as coronavirus kills risk

• Kiwi dumped almost a big figure amid coronavirus-linked risk-off
• Oil slump deepens the losses in the commodity-currency.
• RBNZ rate cut bets rise, as eyes remain on virus updates, US data.

Amid broad risk-aversion, the selling pressure around the New Zealand dollar remains intact, as NZD/USD hovers close to a new four-month low of 0.6232 reached in the last hour.

Coronavirus headlines lead the way

As the fears over a potential coronavirus pandemic intensifying each passing day, with the number of new cases outside China rapidly rising, investors continue to snap higher-yielding/ risk assets such as the Kiwi in search for safe-havens.

Further, the blood bath in the global equity markets, Treasury yields and Wall Street futures amid increased global recession risks, which further deteriorates the market mood and exacerbates the pain the spot. The latest leg down in the Kiwi was mainly driven by the news that New Zealand confirmed its first coronavirus case, as the infectious respiratory disease spreads across the globe.

The major is down over 1% and lost almost 90-pips from the daily high of 0.6319 reached in early Asia. With growing concerns over the negative coronavirus impact, the rate cut expectations from the Reserve Bank of New Zealand (RBNZ) have ramped up, just as markets have almost priced-in a March Fed rate cut.

Further, the collapse in oil prices also collaborates with the downside in the resource-linked Kiwi. Oil prices are down over 3% at the weakest levels in 13 months.

Meanwhile, broad-based US dollar weakness also failed to move the Kiwi bears, as the virus-led risk sentiment continues to emerge as a key market driver. The focus now shifts to the US Core PCE Price Index and Consumer Sentiment data for near-term trading impetus.

NZD/USD technical levels to watch out