Positive Risk Sentiment Helps Kiwi Persevere Amid Domestic Covid Angst

NZD/USD ground higher Thursday, buoyed by positive risk sentiment. The rate trimmed gains on the back of a bout of greenback purchases into the WMR fix, but recovered later in NY hours, approaching earlier intraday highs.

• New Zealand extended the suspension of quarantine-free travel with New South Wales for another 12 days. Meanwhile, the positive Covid-19 case from Australia who recently visited Wellington has been linked to a Delta variant cluster in Sydney, but it has not been confirmed by genomic sequencing yet if the traveller was infected by the highly transmissible variant. New Zealand has not declared any new Covid-19 cases in community so far.
• NZ Westpac Employment Confidence Index rose to 103.9 in Q2 from 99.5 recorded in Q1. The accompanying commentary noted that "perceptions about current job opportunities rose further, confirming that the demand for workers is strong," but "the results suggest some caution around the recent stories of labour shortages".
• New Zealand's trade report for the month of May headlines the local docket today. Next week, focus turns to Wednesday's final ANZ Business Confidence, Thursday's building permits & Friday's ANZ Consumer Confidence.
• With NZD/USD trading virtually unch. at $0.7062, bulls set their sights on the 38.2% recovery of the May 26 - Jun 18 sell-off at $0.7073, which capped gains Thursday. Next resistance is provided by Jun 15 high of $0.7161, located just shy of the 61.8% retracement of the aforementioned swing. Bears look for a retreat towards Jun 18 low of $0.6923, a key near-term support.