NZD/USD remains depressed near mid-0.6600s, results of US election awaited

• NZD/USD witnessed a dramatic turnaround from six-week tops amid resurgent USD demand.
• The tighter than expected race weighed on the risk sentiment and further undermined the kiwi.

Following some good two-way price swings during the Asian session, the NZD/USD pair now seems to have stabilized near mid-0.6600s.

The pair added to this week's strong gains and shot to six-week tops, around the 0.7245 region during the early part of the trading action on Wednesday before witnessing a dramatic intraday turnaround. The NZD/USD pair retreated around 130 pips from daily swing highs in reaction to the incumbent President Donald Trump's victory in the battleground state of Florida.

The incoming US election results indicated that the race is tighter than expected. In fact, the latest tally on the electoral College now stands at 233 for both Joe Biden and Donald Trump. Moreover, the announced delay in results from key states Wisconsin, Michigan and Pennsylvania fueled uncertainty about the actual outcome and tempered investors' appetite for riskier assets.

This, in turn, drove investors back towards the US dollar in order to hedge their positions and prompted some aggressive selling around the NZD/USD pair, though the bearish pressure eased ahead of the 0.6600 round-figure mark. Nevertheless, the pair, for now, seems to have snapped two consecutive days of the winning streak as the focus remains on the US political developments.

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