NZDUSD drops below 0.7000 as risk sentiment deteriorates
- NZD/USD remains on track of further downside momentum.
- US dollar gains after new coronavirus outbreak in Asia-pacific region.
- Risk aversion among investors turns Kiwi lower against the US dollar.
The strong buying pressure in the US dollar exerts pressure on NZD/USD. The pair traded with pessimism on Tuesday and broke 0.7000 in the early US session.
At the time of writing, NZD/USD is trading at 0.6994, up 0.01% for the day.
The rebound in the US Dollar Index (DXY), which measures the greenback performance against its six major rivals, drags NZD/USD toward lower levels. The US dollar stands above 92.0 with strong gains.
Investors remain cautious about the renewed concern on rising Delta variant COVID-19. Increasing corona cases in the Asia-Pacific region underpins the demand of the US dollar on the back of its global safe haven asset.
On the domestic economic data front, the S&P CoreLogic Case-Shiller Home Price Index rose 14.9% in April, above the market expectations at 14.5%. Lower mortgage rates helped the index to gain record growth.
On the other hand, Kiwi lost its ground as risk appetite worsened due to increasing COVID-19 cases in neighbouring countries as investors feared that it could derail the global economic recovery.
Meanwhile, comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr that economic activity is returning to its pre-COVID-19 levels failed to provide any strength to NZD.
It is worth noting that S&P 500 Futures were trading at 4,284 with 0.01% gains.
As for now, traders are waiting for New Zealand’s ANZ Business Confidence data. In the US economic docket, Chicago PMI and Pending Home Sales data will be watched to gain fresh trading impetus.
NZD/USD addition levels