Kiwi Loses Ground Amid Risk Aversion

NZD/USD dropped after Asia hours Tuesday as concerns about Russian gas supplies to Europe resurfaced, denting broader risk sentiment.

• Disappointing results from Walmart weighed on the equity space, albeit the news that Alibaba will seek a primary listing in Hong Kong provided some incremental reprieve to Chinese shares. Still, most benchmark indices outside of Asia registered losses and the VIX index crept higher.
• The aggregate Bloomberg Commodity Index gained, but the kiwi dollar failed to capitalise on that move amidst negative risk backdrop. To the contrary, firmer iron ore prices may have exacerbated its losses against the Aussie.
• NZD/USD last deals at $0.6238, little changed on the day. The key near-term bearish target is provided by $0.6061, which limited losses on Jul 14. On the flip side, a rebound above the 50-DMA/Jun 24 & 27 highs at $0.6312/27 would bring Jun 16 high of $0.6396 into view.
• In the absence of local data releases, focus falls on Australian Q2 CPI, with participants on the lookout for any trans-Tasman spillover.
• Coming up later this week are ANZBO (Thursday) and ANZ-Roy Morgan Consumer Confidence (Friday).