The Kiwi flirted with the 0.7000 price line, after rising the most in multiple days to the two-week high, amid the initial Asian session on Monday. The NZDUSD pair keeps Fed Chair Jerome Powell led gains but finds multiple headwinds towards the north.
Fed Chair Powell lifted global market sentiment on Friday, despite indicating taper this year. The cause could be linked to the central banker’s refrain from offering any exact timing and indicating a gap between the taper and rate hike. Also, comments like “We will be carefully assessing incoming data and the evolving risks,” offered extra confirmation to the markets that the easy money policy is here to stay, at least for now.
Following the key event, market sentiment lifted, and the US Dollar Index fell to a two-week low, helping equities, commodities, and NZDUSD prices. However, a lack of clarity over New Zealand’s covid conditions joins other challenges to the risk appetite while restricting the short-term NZDUSD moves.
Hurricane Ida roils energy output and challenges the global risk appetite whereas US President Joe Biden’s comments that Chinese officials worked to prevent investigators from assessing covid origins join the line as well.
Given the absence of major economic data, the kiwi pair is likely to remain range-bound amid mixed catalysts. Though, US traders’ response to Friday’s key event and second-tier data, like Pending Home Sales for July and Dallas Fed Manufacturing Business Index for August, will be important. In conclusion, NZDUSD traders may wait for this week’s US NFP to clarify the Fed tapering clues.
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