NZD / USD trades at 0.6750 after hitting new yearly lows at 0.6740

• The NZD / USD pair has had a moderate start to the week and is trading just below the yearly lows at the 0.6750 zone.
• In the absence of major economic events in New Zealand, the pair will be driven this week by USD flows.

The NZD / USD mostly stayed within the adjusted range of 0.6740-0.6760 over the course of the session so far. The pair modestly escaped a new yearly low at 0.67407 to simply break above last Friday’s low. At current levels just above 0.6750, the kiwi is trading very close to its weakest level against the US dollar since November 2020. Currently, the pair is down more than 6.0% from its early November highs near 0.7200.

The moderate NZD / USD price action at the beginning of the week is not too surprising given the absence of key economic events in New Zealand or the United States on Monday and the proximity of major data release later in the week. The most interesting US data will be the JOLT job listing for October on Wednesday, weekly jobless claims on Thursday, consumer price inflation for November and preliminary consumer confidence data for December from the University of Michigan on Friday.

While the CPI will attract the most interest given the Fed’s growing concern over more persistent excess inflation, weekly unemployment figures and consumer confidence data for December will be watched closely to see if the recent rise in prices Covid-19-Omicron infections in the US are still affecting the economy. There are no notable economic events in New Zealand this week, which means that the NZD / USD price action is likely to be driven primarily by USD flows, risk appetite, and movements in commodity prices.

Technical levels