NZD / USD bounces modestly from multi-week lows, remains below 0.7050

• The NZD / USD is falling for the second consecutive trading day.
• The USD market valuation propelled the NZD / USD movements on Monday.
• The decline in US equity futures suggests that safe-haven flows will dominate the US session.

After advancing to a new multi-year high of 0.7172 last Thursday, the pair NZD / USD made a technical correction and closed in negative territory on Friday. With market sentiment turning sour on Monday, the pair came under heavy downward pressure and fell to its lowest level since November 27 at 0.7003. However, before the US session, the NZD / USD began to consolidate its daily losses and was last seen losing 1.25% on the day at 0.7035.

COVID-19 headlines weigh on sentiment

As for reports from the UK suggesting that the new coronavirus series is 70% more transmittable, investors became cautious. The risk-off market environment triggered a deep selloff in major global equity indices and allowed the USD to outperform its rivals.

The US Dollar Index, which hit a weekly high of 91.02 earlier in the day, is currently gaining 0.6% to 90.66. Meanwhile, S&P 500 futures and Dow Jones futures were down 1.7% and 1.5%, respectively, suggesting that safe-haven flows will continue to dominate financial markets in the second half of the day.

Earlier in the day, New Zealand data revealed that credit card spending in November was down 5.6% annually, but this reading was largely ignored by market participants. The only data that will appear on the US economic calendar on Monday will be the Chicago Fed National Activity Index.

Technical levels