- NZD/USD captures new buying on Monday and approaches monthly high again.
- Risk appetite weighs on the safe-haven USD and benefits the perceived riskier NZD.
- The absence of relevant economic releases warrants some caution before opening aggressive bullish positions.
The pair NZD/USD has built on its steady intraday rise at the start of the European session on Monday and has risen to a new daily high around the 0.6725 region.
The pair captured new purchases near the 0.6680 region on Monday and approached a monthly high amid modest US dollar weakness. Risk appetite turned out to be a key factor weighing on the safe haven USD and benefiting the higher perceived risk NZD.
French President Emmanuel Macron’s office announced Monday that the US president, Joe Biden and his Russian counterpart, Vladimir Putin, have agreed in principle to hold a summit on the Ukraine crisis. This revived hopes for a diplomatic solution to the current standoff and raised global risk sentiment.
The USD came under further pressure from uncertainty over Fed tightening plans. The minutes from the January 25-26 FOMC meeting did little to bolster expectations of a 50 basis point rate hike in March. Furthermore, geopolitical developments could force the Fed to adopt a less aggressive stance to combat high inflation.
Therefore, the market will focus on the upcoming meeting between US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov scheduled for February 24. The fundamental backdrop seems tilted in favor of the bulls, although the absence of relevant economic releases could prevent investors from opening aggressive positions.
NZD/USD technical levels
Source: Fx Street
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