NZD/USD rebounds modestly from multi-week lows, stays below 0.7050
- NZD/USD is falling for the second straight trading day.
- USD’s market valuation drives NZD/USD’s movements on Monday.
- Slumping US stock futures suggest safe-haven flows will dominate the American session.
After advancing to fresh a fresh multi-year high of 0.7172 last Thursday, the NZD/USD pair made a technical correction and close in the negative territory on Friday. With the market mood turning sour on Monday, the pair came under strong bearish pressure and slumped to its lowest level since November 27 at 0.7003. Ahead of the American session, however, NZD/USD started to consolidate its daily losses and was last seen losing 1.25% on the day at 0.7035.
COVID-19 headlines weigh on sentiment
Concerning reports from the UK suggesting that the new string of the coronavirus is 70% more transmissible caused investors to turn cautious. The risk-averse market environment triggered a deep selloff in major global equity indexes and allowed USD to outperform its rivals.
The US Dollar Index, which touched a weekly high of 91.02 earlier in the day, is currently gaining 0.6% at 90.66. Meanwhile, S&P 500 Futures and Dow Jones Futures are down 1.7% and 1.5%, respectively, suggesting that safe-haven flows will continue to dominate the financial markets in the second half of the day.
Earlier in the day, the data from New Zealand revealed that Credit Card Spending in November declined by 5.6% on a yearly basis but this reading was largely ignored by the market participants. The only data featured in the US economic docket on Monday will be the Chicago Fed National Activity Index.
Technical levels to watch for