NZD/USD sellers attack 0.6800 as yields, New Zealand corona virus cases drop

NZD/USD maintained yesterday’s downtrend and dropped to 0.6800 during Wednesday’s Asian session. In doing so, the Kiwi pair discourages positive news regarding the coronavirus at home amid widespread pessimism about the virus. Stronger expectations of the Fed slated to raise rates in 2022 are also putting downward pressure on the listing. While reporting 46 new community cases of Covid19 in New Zealand, the NZ Herald said: ‘during the holiday period. On the other hand, “China reported 197 confirmed new corona virus cases on December 28, up from 209 cases a day earlier, its health authorities said on Wednesday,” according to Reuters.

It should be noted that the UK is reporting a record number of daily infections, exceeding 122,000 a day after authorities ruled out any further activity restrictions for the rest of 2021. France joins with 179 807 new confirmed cases, making it the world’s heaviest daily toll. Elsewhere, “The average number of new COVID19 cases in the United States has increased by 55% to more than 205,000 per day over the past seven days,” according to a Reuters tally. Additionally, Australia’s most populous state of New South Wales (NSW) reported a doubling of fallopian tube infections on Tuesday, with 11,201 new infections and three deaths from the virus.

Inflation expectations in the United States remain close to monthly highs, according to 10-year breakeven inflation data from the Federal Reserve Bank of St. and weigh in on the NZD/USD price. That said, the US released mixed data a day earlier, with the US home price index falling below the 1.2% forecast at 1.1% in October, while The S&P/Case Shiller home price index fell 19.5% ahead of 18.4%, against 18.5% of market consensus. . However, the Richmond Fed manufacturing index for December broke the adjusted number, rising from 12.00 to 16.00%.

Amid those games, the 10-year US Treasury yield remains under pressure at 1.475% while the two-year benchmark, which hit its highest since March 2020, is also hovering at 0.746%. Additionally, the S&P 500 Futures index showed slight gains, while the latest Asia-Pacific stocks traded mixed.

Looking forward, US tier two data could keep NZD/USD traders entertained, but risk catalysts are key importantly, weak liquidity conditions towards the end of the year could limit the pair’s momentum.