NZD/USD stages decisive rebound, trades near 0.6870
- NZD/USD is rising sharply following last week's slump.
- Risk-positive market atmosphere helps kiwi erase its losses on Monday.
- US Dollar Index stays in the negative territory ahead of PMI data.
The NZD/USD pair closed the previous five trading days in the negative territory and started the new week in a recovery mode. As of writing, the pair was up 0.68% on a daily basis at 0.6872.
NZD capitalizes on risk flows, RBNZ commentary
The upbeat market mood at the start of the week is helping the kiwi gather strength. Although there were no high-tier macroeconomic data releases from New Zealand, the sharp upsurge witnessed in major equity indexes in Asia provided a boost to NZD/USD.
Moreover, Reserve Bank of New Zealand (RBNZ) Chief Economist Yuong Ha noted on Monday that the Delta variant is not a game-changer with regards to policy outlook despite the fact that it raises some economic uncertainty.
On the other hand, the greenback is struggling to find demand in the risk-positive market environment. The US Dollar Index is currently losing 0.2% on the day at 93.27. Later in the session, the IHS Markit will publish the preliminary August Manufacturing and Services PMI reports for the US. The Federal Reserve Bank of Chicago's National Activity Index and July Existing Home Sales data will also be looked upon for fresh impetus.
Meanwhile, Wall Street's main indexes remain on track to start the day higher, suggesting that risk flows are likely to make it difficult for the USD to erase its losses.
On Tuesday, second-quarter Retail Sales data will be released from New Zealand.
Technical levels to watch for