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NZD/USD sinks after New Zealand lockdown for 1 covid case

“Quality means doing it right when no one is looking.” - Henry Ford

 

 

HEADLINES

 

 

  • New Zealand’s currency slides after country enters three-day lockdown
  • Dollar gains for 2nd day on Afghanistan, Delta variant worries
  • Gold sees some routine profit-taking after recent good gains
  • Bearish Sentiment Begins To Take Hold In Oil Markets
  • Tech stocks, Home Depot pull S&P 500, Dow from record highs
  • Michael Burry of ‘Big Short’ Bets Against Cathie Wood’s ARKK
  • RBNZ Preview: Odds of rate hike diminish amid fresh covid lockdown - Westpac

 

 

FOREX

 

 

New Zealand’s currency slides after country enters three-day lockdown

 

The New Zealand dollar tumbled on Tuesday after the discovery of a single coronavirus case sparked a three-day nationwide lockdown. Prime Minister Jacinda Ardern announced the new restrictions, which will mean schools, offices and business have to close, after an Auckland man tested positive for Covid-19, the first evidence of community spread of the virus since February.

 

Dollar gains for 2nd day on Afghanistan, Delta variant worries

 

The dollar advanced for a second straight session on Tuesday, bolstered by safe-haven demand, as investors fretted about Afghanistan, a slowing Chinese economy, and the rapid spread of the Delta coronavirus variant which forced some lockdowns.

A much sharper decline than expected in Tuesday's U.S. retail sales curbed gains in the dollar, but that was offset by the higher-than-forecast rise in industrial production, which accelerated the greenback's gains.

 

Dollar keeps running on fear

 

The dollar rallied on the back of risk-aversion, exacerbated by dismal US data… Commodity-linked currencies were the worst performers, with AUD/USD down to a fresh 2021 low of 07242. The USD/CAD pair peaked at 1.2648, its highest in almost a month. Upbeat UK employment data fell short of backing GBP/USD

 

 

COMMODITIES

 

 

Gold sees some routine profit-taking after recent good gains

 

Gold and silver prices are trading weaker in midday dealings, with gold seeing some normal profit-taking pressure from recent good gains. A rally in the U.S. dollar index today is also a negative for the metals markets. Risk-off attitudes are on the rise early this week. The stunningly rapid takeover of Afghanistan by the Taliban has left Americans stranded in the country and its own population running scared.

 

Bearish Sentiment Begins To Take Hold In Oil Markets

 

It has been a quiet start to the week for oil markets, but bearish sentiment is undeniably building as the Delta variant threatens to damage global demand.  Oil and gas majors have withstood the immediate ramifications of a sternly-worded IPCC report warning of the dire consequences of climate change quite well.- Energy companies remain the second-most lucrative investment in the S&P 500 pool, having gained 30% over the course of this year, Bloomberg reports.

 

 

STOCKS

 

 

Tech stocks, Home Depot pull S&P 500, Dow from record highs

 

Wall Street's main indexes slid on Tuesday, weighed down by a decline in mega-cap technology-related stocks and a weak earnings report from Home Depot, while a mixed batch of data suggested an uneven U.S. economic recovery. Home Depot (HD.N) dropped 4.7% after it missed Wall Street estimates for U.S. same-store sales for the first time in two years, as do-it-yourself projects during the height of the pandemic tapered off.

 

Michael Burry of ‘Big Short’ Bets Against Cathie Wood’s ARKK

 

Michael Burry, the investor made famous by “The Big Short” movie, has taken aim at one of Wall Street’s hottest stars. Burry’s Scion Asset Management owned bearish put contracts against 235,500 shares of the ARK Innovation ETF (ticker ARKK) at the end of the second quarter, according to a regulatory filing Monday. The new position was valued at almost $31 million, the filing says.

 

 

ANALYSIS

 

 

RBNZ Preview: Odds of rate hike diminish amid fresh covid lockdown - Westpac

 

“We now expect the Reserve Bank to leave the OCR on hold. Regardless of the economic case for higher interest rates, there is nothing to be gained from pushing the OCR higher now, rather than waiting for more clarity on the covid situation. Experience shows that economic activity tends to bounce back readily once covid restrictions are lifted. And when that happens, the RBNZ will be left facing many of the same issues as before: an economy that is running up against cost pressures and capacity constraints, with risks that inflation could become more persistent. Ultimately, we expect OCR hikes will still be needed, but we will review the likely timing of this as we get more clarity.”

 

 

CHART

 

 

New Zealand dollar / US dollar – Daily Candlesticks

Source: GKFX Prime Metatrader 4

NZD/USD is testing a key zone of support following a sharp drop on Tuesday. A break below a rising RSI trendline suggests the price could follow downwards. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

 


https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/rbnz-preview-forecasts-from-nine-major-banks-dds-of-rate-hike-diminish-amid-fresh-covid-lockdown-202108171346
https://www.reuters.com/business/futures-slip-ahead-retail-sales-data-2021-08-17/
https://www.reuters.com/business/kiwi-plunges-after-new-virus-case-prompts-lockdown-us-dollar-up-2021-08-17/
https://oilprice.com/Energy/Energy-General/Bearish-Sentiment-Begins-To-Take-Hold-In-Oil-Markets.html
https://www.bloomberg.com/news/articles/2021-08-15/new-zealand-expected-to-raise-rates-to-cool-overheating-economy
https://www.bloomberg.com/news/articles/2021-08-16/-big-short-michael-burry-bets-against-flagship-cathie-wood-fund

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