NZD/USD attacks 0.7100 amid risk-off mood

• NZD/USD under pressure, starting out a fresh week.
• The kiwi ignores broad US dollar weakness as risk-off prevails.
• Focus shifts to Fedspeak ahead of the US CPI release.

NZD/USD is on the back foot, defending the 0.7100 level, as the bears look to extend the previous week’s losses amid a downbeat market mood.

The kiwi fails to benefit from the broad-based US dollar weakness, as markets reprice the Reserve Bank of New Zealand’s (RBNZ) rate hike expectations after the Fed and Bank of England (BOE) disappointed the hawks and came in dovish last week.

Further, the fall in the yields amid cold water on hopes of sooner than expected global monetary policy normalization adds to the dour mood, weighing on the higher-yielding NZD. The S&P 50 futures are down 0.07% so far while the benchmark US 10-year Treasury yields are losing 0.20% to trade at 1.45%.

Traders also turn cautious ahead of this week’s US inflation data, which could refuel the Fed’s hawkish expectations, especially after Friday’s solid Nonfarm payrolls. The US economy added 531K jobs in October vs. 425K expectations and 312K previous.

In the meantime, the risk trends and the dollar dynamics will continue to play out, with Fed Chair Jerome Powell’s speech next in focus.

NZD/USD technical levels to consider