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Kiwi Loses Altitude Amid Risk Aversion


Broader risk aversion dragged NZD/USD lower Tuesday, with the pair establishing itself below the psychological $0.7000 level in NY hours. Concern over the highly contagious Delta variant of the coronavirus undermined high-beta FX.

  • Implieds rose yesterday, with NZD/USD 1-month vol topping out at 8.8050%, the highest level since Jun 23.
  • NZD/USD last sits at $0.6996, little changed on the day. A break above Jun 25 high of $0.7095 would clear the way to Jun 15 high of $0.7161. Conversely, a fall through Jun 18 low of $0.6923 would give bears a fresh impetus.
  • RBNZ Gov Orr said Tuesday that economic activity is returning to its pre-Covid levels and policy could normalise over the medium term, if global recovery is sustained.
  • Final ANZ Business Confidence comes out later today, after the flash reading registered at -0.4, while official Chinese PMIs will also grab attention. Building permits take focus tomorrow, while with ANZ Consumer Confidence coming up Friday.

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