NZD/USD: Struggles to hold 0.7000 even as S&P 500 Futures rise 0.40%

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  • NZD/USD recovers from intraday low but snaps three-day winning streak.
  • Chatters over Biden’s infrastructure plan joins covid woes and off in Asia.
  • S&P 500 Futures extend Friday’s gains, US ISM Services PMI will be the key to watch.

Following the early Asian weakness towards visiting the 0.7018 level, NZD/USD bounces off intraday low to around 0.7025 by the press time amid the initial Easter Monday. While off in major Asian bourses, including New Zealand, seems to challenge the kiwi pair’s latest moves, US dollar strength jostles with the S&P 500 Futures to confuse the traders.

Not only Friday’s upbeat employment figures at home but the recent challenges to market sentiment also seem to favor the US dollar off-late. US jobs report for March pleased greenback buyers with the headlines Nonfarm Payrolls (NFP) rallied to 916K versus most market consensus around 500K.

Among the challenges to the risk-on mood, fears of the Brazilian coronavirus (COVID-19) variant and a tough test for US President Joe Biden’s $2.25 trillion infrastructure stimulus in the Senate, due to tax hike, are the key burden to the mood. Also on the risk-negative side could be the Western tussles with China and vaccine jitters.

On the positive side, faster vaccinations in the key developed economies battle recently mixed data.

Meanwhile, New Zealand seems to fade the initial advantage of successfully overcoming the pandemic as the US and the UK regain economic traction. Also, recently downbeat GDP and mixed figures at home raise challenges for the Kiwi pair.

Against this backdrop, S&P 500 Futures keep Friday’s run-up with 0.40% intraday gains but the US 10-year Treasury yield dwindles around 1.70% by the press time.

Looking forward, off in multiple markets in Asia and Europe can keep challenging momentum traders. However, risk catalysts will offer intermediate moves.

Technical analysis

Unless regaining above the 0.7100 threshold, comprising the lows marked during late January and early March, NZD/USD sellers can stay hopeful.

 

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