NZD/USD trims gains and eases towards 0.6940
|- New Zealand's dollar eases from 0.6965 to 0.6940.
- The kiwi remains bid on hawkish RBNZ.
- NZD/USD is expected to remain sideways below 0.7000 – ANZ.
New Zealand has lost steam during Monday’s afternoon US trading and has pulled back from session highs at 0.6965 to 0.6940 area. The pair, however, remains set to close in the green for the third day in a row, after bouncing from 0.6875 low last week.
The kiwi appreciates after the RBNZ hikes rates
The NZD found a fresh impulse on the hawkish RBNZ stance after the Bank announced its first interest rate hike in seven years. The move passed practically unnoticed on Friday, with all eyes on the US Non-Farm Payrolls report, although the increasing expectations of further rate hikes around the corner might have started to offer support to the NZD.
Beyond that, New Zealand’s authorities have reported a decline in new COVID-19 infections, which has prompted the government to ease restrictions in the capital, Auckland, with the latest Delta variant outbreak apparently under control.
NZD/USD: Seen moving between 0.6860 and 0.7000– ANZ
According to the FX Analysis team at ANZ, the pair is expected to remain trapped between 0.6860 and 0.7000 over the next days: “Near-term, the established 0.6860-0.7000 range may hold much of the price action ahead of the FOMC minutes, which will be released mid-week (…) Despite the payrolls miss, the fall in the unemployment rate and strength in average earnings growth helped to keep expectations over a Fed tapering announcement in November intact. That is well discounted and in the very short-term, DXY also looks confined to a 0.9350-0.9450 range.”
Technical levels to watch
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