- Kiwi fails to recover against US dollar, returns to monthly lows.
- Consolidation below 0.6600 to keep the pair under pressure.
- US Dollar Rises Across the Board as US Stocks Drop Sharply.
The NZD/USD completely erased the intraday bounce and is back in the 11-week low area below 0.6600. Earlier on Tuesday, the pair rallied to 0.6644, hitting a two-day high, but reversed and fell again as market sentiment deteriorated.
Risk aversion weighs on NZD/USD
The US dollar is among the best performers on Tuesday, fueled by risk aversion. DXY is trading at the highest level since March 2020 above 102.00, even as US yields decline sharply. The Dow is down 1.68% and the Nasdaq is down 3.22% ahead of major earnings reports.
The rally in Treasuries is not hurting the dollar. The 10-year US bond yield stands at 2.74% and the 30-year Treasury bond yield stands at 2.83%, levels not seen since April 14. The dollar remains strong as the move is being driven by deteriorating market sentiment and not a change in expectations regarding federal laws. Reserve monetary policy.
NZD/USD will likely remain under pressure below 0.6600. It recently fell to 0.6578, hitting the lowest level since early February. It is hovering near the lows. The next support could be located at 0.6560 followed by the 2022 low around 0.6530.
Source: Fx Street