The NZD/USD pair maintains its selling pressure from the previous day and tests a multi-month low.
On risk aversion, the US dollar has held firm below 13-week highs.
The Kiwi is losing ground versus the US dollar as investors become more risk averse.
In the Asian session, the NZD/USD continues its downward trend from the previous day, retesting the multi-month low of 0.6940.
In the American session, the pair came under severe selling pressure and fell further from near three-week highs, which were reached earlier this week just over the 0.7100 mark.
NZD/USD is falling due to a comeback in the US Dollar Index (DXY), which measures the greenback’s performance against six main rivals. The DXY is steady at 92.4, down from a 13-week high, as US Treasury yields fall due to fresh concerns over the US economy’s recovery.
Initial Jobless Claims in the United States unexpectedly increased, indicating that the labor market recovery is still far from the Fed’s target. The data came in at 373 thousand, which was higher than the market’s expectation of 350 thousand.
Investors are nonetheless wary of the increased number of Delta variant COVID-19 infections. The demand for the US dollar as a worldwide safe haven asset is being bolstered by an increase in corona cases in the Asia-Pacific region.
Kiwi, on the other hand, lost ground as risk appetite deteriorated as a result of an increase in COVID-19 cases in neighboring countries, which investors feared might undermine the global economic recovery.
The Reserve Bank of New Zealand (RBNZ) will unveil its bond-buying program in the meantime. Regardless of whether the RBNZ decides to keep the amount at $200 million or cut it, the Bank of New Zealand (BNZ) expects the program to finish soon.
The S&P 500 Futures were trading at 4,294 with a gain of 0.043 percent.
In the absence of any substantial fundamental stimulus, the pair’s performance is still influenced by minor US dollar strength and a severe worsening in global risk sentiment./n
