- NZD / USD is building on the gains of the last week on Monday.
- Broad-based USD weakness helps pair climb.
- Risk flows are likely to dominate the markets during the US session.
The pair NZD / USD it closed the previous three weeks in positive territory and retained its bullish momentum at the beginning of the week. With risk appetite weighing on the dollar, the pair rose to its highest level since December 2018 at 0.6967. At time of writing, the NZD / USD was up 0.5% on the day at 0-6961.
The US Dollar Index (DXY) lost 0.4% last week as positive developments around coronavirus vaccine candidates revived hopes for a steady recovery in the world economy in 2021. Reflecting market optimism , S&P 500 futures are gaining 0.5% and the USD is likely to struggle to make a rally if US stocks maintain a solid footing after the opening bell. At the moment, the DXY is down 0.32% to 92.06.
Earlier in the day, data released by Statistics New Zealand showed retail sales in the third quarter were up 28% on a quarterly basis. This reading followed the second quarter contraction of 14.8% and beat the market expectation of 20% to provide a boost to the kiwi.
No major macroeconomic data from New Zealand will be released on Tuesday and risk perception is likely to remain the main driver of the NZD / USD movements.