NZD/USD bulls move in and 0.6850s for the day ahead
07.03.2022, 20:38

NZD/USD bulls move in and 0.6850s for the day ahead

  • NZD/USD bulls move in at the lows of the day and a correction into 0.6850 could be on the cards. 
  • The US dollar was on the verge of a test into 100 DXY as US yields recover.  

NZD/USD's sell-off is decelerating in late New York after falling some 0.55% on the day. The bulls are moving in on what might be regarded as a bargain near the lows of the day at 0.6821. It has been a US yields/dollar and oil story at the start of the week.

The greenback has rallied to almost just half a point shy of 100.00 on the DXY index as investors look for a safe haven, backed by the promising central bank divergence in the Federal Reserve meeting net week. US yields have recovered some lost ground as well which benefitted the US dollar. 

''Risk sentiment remains fragile, there is still plenty of water to flow under the proverbial bridge, and more volatility seems likely,'' analysts at ANZ bank argued,

''But to the extent that the RBNZ had no choice but to head off inflation risks with hikes, and with NZ interest rates already top-of-the pack, that should be beneficial for the NZD. But it’s a messy situation, and we do of course have signs of real fatigue in the domestic economy.''

The commodity sector is strong and therefore, the antipode and the CAD are likely to remain well supported for the while that uncertainty prevails over how sanctions will impact Russia and the commodities markets. Oil prices are at the core of the risk-off sentiment with WTI opening at USD130/bbl on concerns about sanctions being placed on Russian energy. 

NZD/USD H1 chart

 

 

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