- The NZD / USD remains under heavy bearish pressure on Monday.
- The US dollar index extends the rally to new multi-month highs.
- The major Wall Street indices appear to open sharply lower.
After staying relatively quiet around 0.7000 during Asian trading hours, the pair NZD / USD was under renewed downward pressure and was last seen trading at 0.6944, where it was down 0.9% on the day.
The USD starts the new week on a firm footing
In the absence of fundamental developments and high-level macroeconomic data releases, the perception of risk drives the USD market valuation at the beginning of the week. With growing concern over the spread of the COVID-Delta variant, the market mood turns sour on Monday and the US Dollar Index is up 0.3% on the day at 92.99.
Reflecting the risk-off environment, S&P futures and Nasdaq futures are down about 1%. A sharp drop in major US stock indices is likely to allow the dollar to continue to outperform its rivals in the second half of the day.
Hours earlier, New Zealand data showed Business NZ’s Service Performance Index improved to 58.6 in June from 56.3 in July. However, this upbeat reading did not help the kiwi find demand.
There will be no release of US data for the remainder of the day. On Tuesday, the PBoC interest rate decision and RBA Meeting Minutes will be examined for fresh momentum.