NZDUSD looks to extend losses beyond 0.7000 as risk sentiment deteriorates

  • NZD/USD manages to hold onto 0.7000 following the previous session’s decline.
  • US Dollar Index remains steady below 0.7300 on better-than-expected US employment data.
  • NZD dollar maintains muted tone amid risk aversion despite rate hike expectations.

NZD/USD exhibits some strength on Friday’s European session following the previous session’s sell-off. The pair hovers in a very narrow trade band of 10 pips on USD strength.

The pair witnessed heavy selling pressure in the American session and retreated further from daily highs, the levels just below the 0.7100 mark, touched earlier in the previous week.

The buying pressure in the US Dollar Index (DXY), which measures the greenback performance against its six major rivals, drags NZD/USD toward the lower levels. The DXY trades steady near 93.00.

The US Initial Jobless Claims dropped for a third consecutive week at 375K, closer to a pandemic low of 368K at the end of June.

Meanwhile, several members of Fed officials came in front to support tapering asset purchases in the coming months.

In addition to that, 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.

On the other hand, Kiwi was able to hold near 0.7000 after Fitch in its latest assessment reported the Reserve Bank of New Zealand likely to hike rate in the upcoming monetary policy meeting on August 18.

The sentiment was further supported after the Business NZ Performance of Manufacturing Index gained 62.6 in July, from 60.7 in the previous month.

It is worth noting that S&P 500 Futures were trading at 4,453, down 0.02% for the day.

As for now, all eyes are on US Trade data and Michigan Consumer Sentiment Index for Aug to take fresh trading impetus.

NZD/USD additional levels


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