- NZD/USD has pulled back a bit from session highs near the 0.6800 level and is back in the 0.6750 region.
- Risk appetite worsened during US trade with markets concerned about the global economic impact of the Russo-Ukrainian war.
The NZD/USD it has pulled back a bit from session highs near but modestly below the 0.6800 level and is back in the 0.6750 region, where it is trading down roughly 0.2% on the day. Risk appetite worsened during US trading hours as market participants worried about the impact the Russo-Ukrainian war and massive Western sanctions associated with Russia will have on the global economy.
Indeed, the rise in commodity prices on Tuesday as traders realized that massive financial sanctions on Russia could hamper its ability to export key goods such as energy, some base metals and some agricultural products was a key factor. that influenced confidence. The surge in commodity prices that saw oil prices near their 2014 highs and wheat futures hit their highest level since 2008 has naturally helped cushion some of the losses suffered by price-sensitive currencies. commodities, such as the kiwi, against the safe-haven US dollar.
That explains why the typically highest beta kiwi currently sits near the middle of the G10 performance chart for the day. Rhetoric from regional Fed Chairs, including Loretta Mester and Raphael Bostic, highlighted on Tuesday that the Fed is well aware of upside inflation risks/downside growth risks as a result of the Russo-Ukrainian war. But, unsurprisingly, policymakers noted that the Fed’s path remains toward removing policy support. This did not affect the dollar much, as did the strong ISM manufacturing PMI data earlier in the day.
There will be plenty more speeches from Fed members and US data this week that would normally generate a lot of movement, but this week is likely to play second fiddle to geopolitical events and related shifts in risk appetite. . NZD/USD traders will be watching to see if the pair can rediscover any short-term directional momentum that could take the pair into the 0.6650-0.6800 range low that has prevailed in recent days.
Technical levels
Source: Fx Street
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