NZD/USD continues to push lower toward 0.6700 on broad USD strength

• NZD/USD is falling sharply after closing the previous week higher.
• Greenback is capitalizing on safe-haven flows on Monday.
• FOMC Chairman Powell is scheduled to speak later. 

The NZD/USD pair closed the previous week in the positive territory as the kiwi gathered strength on expectations that the Reserve Bank of New Zealand (RBNZ) will keep its policy rate unchanged until March 2021. However, the risk-averse market environment at the start of the week provided a boost to the safe-haven USD and caused the pair to fall sharply. As of writing, NZD/USD was down 0.82% on a daily basis at 0.6703.

DXY erases last week’s losses on Monday

Sharp upsurge witnessed in coronavirus infection numbers, especially in the Europe, is weighing on the market mood on Monday. At the moment, major European equity indexes are down between 3.1% and 3.3% and the S&P 500 futures are losing more than 1.5%. Meanwhile, the US Dollar Index (DXY), which lost 0.3% last week, is gaining 0.33% on the day at 93.31. 

In the second half of the day, investors will be paying close attention to FOMC Chairman Jerome Powell’s speech. The Federal Reserve Bank of Chicago’s National Activity Index will be the only data featured in the US economic docket and the risk perception is likely to continue to impact NZD/USD’s movements.

 In the early Asian session on Wednesday, the RBNZ will announce its Interest Rate Decision and release the Rate Statement. 

Technical levels to watch for