NZD/USD erases early losses, posts small daily gains near 0.6550
- NZD/USD is registering modest gains around mid-0.6500s on Monday.
- Retail Sales in New Zealand fell sharply in second quarter.
- Greenback struggles to find demand as risk flows dominate markets.
The NZD/USD pair started the new week under modest pressure and dropped toward 0.6520 area but gained traction on the back of risk flows ahead of the American session. As of writing, the pair was up 0.17% on a daily basis at 0.6550.
NZD ignores disappointing data from New Zealand
Earlier in the day, the data published by Statistics New Zealand showed Retail Sales in New Zealand declined by 13.6% on a quarterly basis in the second quarter. Although this reading weighed on the kiwi, the upbeat market mood helped NZD/USD reverse its direction.
US President Donald Trump announced that they will authorize the emergency usage of COVID-19 plasma treatment and provided a boost to sentiment. Reflecting the risk-on environment, major European equity indexes are gaining between 1.6% and 2.1% on the day.
Meanwhile, the US Dollar Index (DXY) is edging lower on Monday as the greenback struggles to find demand as a safe-haven. Ahead of the Federal Reserve Bank of Chicago's National Activity Index, which is will be the only data featured in the US economic docket, the DXY is down 0.3% at 92.92.
Later in the week, FOMC Chairman Jerome Powell opening remarks at the Jackson Hole Symposium will be watched closely by market participants for fresh clues regarding a possible shift in forward guidance or policy outlook.
Technical levels to watch for