- NZD/USD inches lower after making a good start to the fresh trading week.
- US Dollar Index remains tracks lower below 93.50 amid rising equity.
- NZD dollar maintains muted tone amid risk aversion, RBNZ surprised move.
NZD/USD exhibits some strength on Monday’s Asian session following the previous week’s sell-off. The pair opened lower and swiftly recovered above 0.6850, but skid marginally lower.
The pair witnessed heavy selling pressure in the previous week and retreated toward the yearly lows of around 0.6800.
At the time of writing, NZD/USD is trading at 0.6839, up 0.21% for the day,
The US Dollar Index (DXY), which measures the greenback performance against its six major rivals losses its upside momentum and trades lower near 97.30 with 0.18% losses.
The increasing corona cases in the Asia-Pacific region underpins the demand of the US dollar on the back of its global safe-haven asset, despite recent pullback correction.
On the other hand, Kiwi gained on higher global equities and general risk-on sentiment. The Shanghai Composite record 1.1% gains after China’s health authority said no locally transmitted cases of COVID-19 for the first time since July.
It is worth noting that S&P 500 Futures were trading at 4,441, up 0.81% for the day.
The upside is capped for the Kiwi after New Zealand Prime Minister Jacinda Arden suspended the parliament for one week and the extension of lockdown until midnite 31 August. The delay in a rate hike from the central bank also weighed on the sentiment.
As for now, all eyes are on US Markit Purchase Managers Index (PMI) to take fresh trading impetus.