NZD / USD recovers modestly, remains lower around 0.6970

• The NZD / USD fell to a daily low of 0.6949 on Monday.
• The USD gains strength against its rivals earlier in the week.
• All eyes are on the 10-year US Treasury auction at 17:00 GMT.

The pair NZD / USD it bounced and rallied towards 0.7000 on Friday, but was unable to preserve its bullish momentum at the beginning of the week. After falling to a daily low of 0.6949, the pair rose slightly and was last seen shedding 0.45% on the day at 0.6965.

Hours earlier, New Zealand data showed e-card retail sales rose 0.9% in June after rising 1.7% in May. Market participants paid little or no attention to this report and the risk averse market environment made it difficult for kiwi to find demand.

USD capitalizes on risk aversion flows

On the other hand, the US Dollar Index is up 0.25% on the day at 92.32, not allowing the NZD / USD to erase its losses. No high-level US macro data will be released for the remainder of the day and investors will pay close attention to the 10-year US Treasury auction, which is scheduled for 17:00 GMT.

Meanwhile, the major Wall Street indices appear to open mixed on Monday with Nasdaq Futures rising 0.4% and Dow Futures losing 0.25% before the opening bell.

In the early trading hours of the Asian session on Wednesday, the Reserve Bank of New Zealand (RBNZ) will release its policy statement along with the interest rate decision. Investors expect the RBNZ to leave its policy rate unchanged at 0.25%, but the latest upbeat data from New Zealand and concerns about inflation could force the bank to signal a tightening move towards the end of the year.

Technical levels