- The NZD / USD sees some selling on Tuesday amid resurgent demand for the USD.
- The troubles surrounding COVID-19 weigh on investor sentiment and benefit the safe-haven USD.
- Falling US bond yields could act as a headwind for the USD and help limit the pair’s losses.
The pair NZD / USD spreads its intraday losses and trades near its daily lows around the region of 0.6950 during the European session on Tuesday.
After a brief consolidation during the first half of trading action on Tuesday, the NZD / USD pair has seen some heavy selling and has returned its modest earnings recorded in the last two days. The intraday drop is due exclusively to a sudden spike in demand for the US dollar amid a new episode of risk aversion.
Investors follow concerned that the spread of the highly contagious Delta variant of the coronavirus could derail the economic recovery world. This, in turn, has affected global risk sentiment, which has been evidenced by a sharp decline in equity markets and provided a good boost to the safe-haven USD.
Meanwhile, risk aversion in the markets has triggered a further decline in US Treasury yields. This could act as a headwind for the USD and keep investors from opening any aggressive bearish positions around the NZD / USD pair. Therefore, it will be wise to wait for some follow-on selling before positioning for any further drops.
Market participants are now awaiting the US economic calendar, which highlights the publication of durable goods orders and the Conference Board’s consumer confidence index. This, along with broader market risk sentiment, will influence USD price dynamics and provide some short-term trading momentum over the NZD / USD.
NZD / USD technical levels
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