NZD/USD wavers around mid-0.7100s as US Senate jostles over $2,000 paycheck

• NZD/USD trims recent gains while waiting for US covid aid stimulus voting.
• US Senate Majority Leader Mitch McConnell probes President Trump’s favor for $2,000 paycheck, a veto over defense bill.
• Fears of the spread of virus strain found in the UK also probe the risks.
• A light calendar ahead of the US session keeps kiwi traders searching for US aid package updates, virus news.

NZD/USD declines to 0.7143, currently around 0.7149, while consolidating Tuesday’s gains during the early Asian session on Wednesday. The kiwi pair’s recent weakness can be traced to the cautious sentiment amid uncertainty over the much-awaited US coronavirus (COVID-19) paycheck disbursement as well as the latest updates on the covid variant.

With Senate Republican Majority Leader McConnell’s clear no for the $2,000 paycheck and President Donald Trump’s veto over the defense bill, market sentiment sours after the previous day’s optimism that weighed on the US dollar. Following US President Trump’s signing of the much-awaited stimulus, he asked for an additional $1,400 payment over the previously agreed $600, as well as to repeal section 230 of the defense bill. While the House has already backed the paycheck amount the bill reaches the Senate where it has major hurdles to cross.

On the other hand, Colorado reports the first US case of the covid variant found in the UK. The issue becomes even more serious as the infected doesn’t have any travel history. The same pushed US Assistant Secretary for Health Brett Giroir to tell MSNBC that the US should extend test requirements for travelers beyond Britain.

It should also be noted that chatters around China’s likely economic conditions in 2021 and New Zealand’s ability to overcome the pandemic, not to forget Brexit and virus vaccine, try to offer extra direction during the dull hours, due to the year-end holiday mood.

Against this backdrop, Wall Street benchmarks eased from the record top to close in minor losses whereas S&P 500 Futures struggle for a clear direction by press time.

Moving on, kiwi traders will keenly await updates from the US Senate, relating to the stimulus, for fresh impulse while COVID-19 and news concerning China can also entertain the market players. During the US session, second-tier data for manufacturing and housing are up for publishing.

Technical analysis

Unless breaking a confluence of the seven-day-old ascending trend line and 21-day SMA, around 0.7090, NZD/USD buyers can remain hopeful to refresh the yearly high towards 0.7200.