- NZD/USD built on the overnight positive move and gained traction for the second successive day.
- The risk-on impulse benefitted the perceived riskier kiwi amid the ongoing USD retracement slide.
The NZD/USD pair continued scaling higher through the early part of the European session and climbed to four-day tops, around the 0.6940-45 region in the last hour.
A combination of factors assisted the NZD/USD pair to build on the overnight positive move and gain some follow-through traction for the second consecutive session on Tuesday. With the latest leg up, the pair has now recovered over 130 pips from YTD lows, around the 0.6800 round-figure mark touched last Friday.
Investors drew comfort after the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech COVID-19 vaccine. This was evident from a generally positive tone around the equity markets, which undermined demand for the safe-haven greenback and acted as a tailwind for the perceived riskier kiwi.
That said, a goodish pickup in the US Treasury bond yields might help limit the ongoing USD pullback from a nine-and-half-month high. Investors might also be reluctant to place any aggressive bets ahead of Fed Chair Jerome Powell's speech at the Jackson Hole Symposium, warranting some caution before positioning for any further gains.
Market participants now look forward to the US economic docket, featuring the second-tier releases of New Home Sales and Richmond Manufacturing Index. The data might do little to provide any meaningful impetus, though the broader market risk sentiment might influence the USD and produce some trading opportunities around the NZD/USD pair.