On Wednesday, the New Zealand dollar posted gains. NZD/USD traded at 0.6306, an increase of 0.49% in the North American session. NZD/USD gained around 1% in the previous session but has since retraced some of these gains.
China opens new door to New Zealand, boosting the New Zealand dollar
Trades have been very slow after Christmas and there aren’t any New Zealand or Chinese events. However, the New Zealand Dollar was active and made sharp gains earlier today. The driver behind the New Zealand dollar’s surge was China’s announcement that international travelers would no longer have to be quarantined when arriving on the mainland. This is an important move by China as it continues to reopen its measures, a stark shift from its zero covid policy that was in place up until a few months ago.
What has China done to its covid policies, which went from zero tolerance and relaxed restrictions to complete a U-turn? Although there were many protests against zero covid earlier this month, the government seemed more concerned about the slowdown in China’s economy due to extended lockdowns in Shanghai (and other large cities) than the unprecedented demonstrations. Covid infections rose predictably after the Covid restrictions were relaxed.