The New Zealand dollar has hit the pause button on its recent rally against the US dollar. After surging nearly 2% over the last week, the kiwi has slumped toward the key 0.60 threshold, despite new COVID-19 infections slowing down and global financial markets rebounding. Are investors taking the profits on good news, or is something hiding underneath the surface?

The New Zealand dollar has been surging on economic data coming out of China. A lot of reports this month have suggested that the economic damage from the coronavirus pandemic is not as severe as many analysts had forecast. On Tuesday, Beijing’s exports and imports were not as weak as initially projected, leaving many investors hopeful that the world’s second-largest economy can rebound quickly.

Coronavirus infections have also slowed down in the country. According to the most recent figures, there were only 29 new confirmed cases, down from 50 on Monday. This is below the twin peaks of 89 on April 2 and April 5. So far, New Zealand has reported just one death from COVID-19.

Australia has witnessed comparable trends, showing a tapering in the number of confirmed cases. To date, Australia has 6,400 infections, with 61 deaths. But nervous investors still see high levels in Europe and the US, with most of the cases concentrated in Spain, Italy, Germany, France, the United Kingdom, New York, and California.

Overall, a lot of the riskier currencies, including the New Zealand dollar and the Australian dollar, have been rallying on par with the broader market. The S&P/NZX 50 Index has tumbled 13% year-to-date, but it has spiked 9% since the March 23 market bottom.

The Reserve Bank of New Zealand (RBNZ) has pumped billions of dollars of liquidity into the economy. The central bank has expanded its quantitative easing program to include local debt, plus it has prohibited financial institutions from paying dividends to shareholders or redeeming capital notes.

On the data front, visitor arrivals declined at an annualized rate of 10.8% in February. New Zealand mostly reported a drop in tourists from China, Hong Kong, and Taiwan. Analysts are warning of a huge collapse in visitor arrivals in the March numbers.

The NZD/USD currency pair fell 0.15% to 0.6084, from an opening of 0.6091, at 17:15 GMT on Tuesday. The EUR/NZD rose 0.68% to 1.8037, from an opening of 1.7935.