NZD/USD: Wellington and kiwi dodge another COVID-19 bullet – ANZ

The kiwi drifts off a touch, but supportive risk appetite and good news on the Wellington COVID-19 situation will likely limit downside, economists at ANZ bank appraise.

Delta variant fears in Australia may weigh on NZD

“The kiwi is a touch lower this morning after what was actually a fairly volatile session in FX markets, which was a little surprising given the lack of data and other catalysts. US 10-yr bond yields are lower and equities are higher, which is more characteristic of ‘risk on’ than ‘risk off’ and somewhat suggestive of a floor in the NZD as the domestic trading session gets underway. 

“The other good news (which is more like a lack of bad news) is that Wellington looks like it may have just dodged another COVID-19 bullet – fingers crossed. However, fears of a potentially worsening covid situation in Australia could weigh via NZD’s correlation with AUD.”

“Support 0.6900/0.6940/0.7030 Resistance 0.7100/0.7230”