NZD / USD bounces away from yearly lows at 0.6787, towards 0.6800

• The New Zealand dollar falls, despite recovering 0.6800, as the market assesses the impact of the omicron variant.
• The omicron variant of COVID-19 causes “mild” symptoms, according to SA health authorities.
• The Fed’s policy makers would like to increase the pace of the bond downsizing, according to the latest Minutes from the FOMC meeting.

During the American session, the NZD it continued its free fall against the dollar, reaching a new low for the year at 0.6787, although it rebounded from that level, trading at 0.6804 at press time. Market sentiment is bullish at the time of writing, as major US equity indices made gains between 0.92% and 2.32%, amid COVID-19 omicron variant problems, appear to fade following positive news from the South African health authorities.

The omicron variant of COVID-19 causes “mild” symptoms, according to SA health authorities

According to the Telegraph, the president of the South African Medical Association, Angelique Coetzee, called the symptoms associated with the variant at this point “different and just as mild” compared to others she treated in recent months. Asked if authorities around the world were panicking unnecessarily, Coetzee said, “yes, at this stage, I would definitely say,” as he confirmed that he was not admitting anyone to the hospital with the new variant.

That said, it appears investors are weighing the current COVID-19 news, with what the World Health Organization (WHO) has to say about it. On Monday, financial markets appear to have stabilized after Friday’s crash.

This aside, the NZD / USD has been trading lower, attributed to the Reserve Bank of New Zealand (RBNZ), disappointing market participants, who were expecting a 50 basis point rate hike in the rate of change to date (OCR) on your last appointment. In addition, last Wednesday, the latest minutes from the FOMC meeting showed that Fed policymakers wanted to increase the pace of QE reduction so that the US central bank could have room for maneuver. in the event that inflation is declared high. That firmly bolstered the USD’s strength against the NZD, which has been adrift since the last RBNZ meeting.

Meanwhile, the US dollar index, which tracks the dollar’s performance against a basket of six rivals, is up 0.26%, settling at 96.33, acting as a tailwind for the US dollar.

Meanwhile, Brown Brother Harriman analysts noted that RBZ chief economist Ha said that “the new variant would have to have a dramatic economic impact to prevent the bank from continuing to raise interest rates. He added that the bank would have raised last week even if omicron had been known at the time, emphasizing that it is not the same as in August, when RBNZ delayed a raise due to a recently announced shutdown. “

That said, the NZD / USD slide could be seen as an opportunity for the NZD bulls to open new bets, as the RBNZ hopes to raise rates again, faster than the Federal Reserve.

Technical levels