NZD/USD extends daily slide, trades below 0.6950 on unabated USD strength

• NZD/USD stays under strong bearish pressure on Monday.
• US Dollar Index extends rally to fresh multi-month highs.
• Wall Street's main indexes look to open sharply lower.

After staying relatively quiet around 0.7000 during the Asian trading hours, the NZD/USD pair came under renewed bearish pressure and was last seen trading at 0.6944, where it was down 0.9% on a daily basis.

USD starts new week on firm footing

In the absence of fundamental developments and high-tier macroeconomic data releases, the risk perception drives the USD's market valuation at the start of the week. With increasing concerns about the spread of the Delta COVID variant, the market mood turns sour on Monday and the US Dollar Index is rising 0.3% on a daily basis at 92.99.

Reflecting the risk-averse environment, the S&P Futures and Nasdaq Futures both lose around 1%. A sharp decline in major equity indexes in the US is likely to allow the greenback to continue to outperform its rivals in the second half of the day.

Earlier in the day, the data from New Zealand showed that the Business NZ Performance of Services Index improved to 58.6 in June from 56.3 in May. Nevertheless, this upbeat reading failed to help the kiwi find demand. 

There won't be any data releases from the US in the remainder of the day. On Tuesday, the PBoC's Interest Rate Decision and the RBA's Meeting Minutes will be looked upon for fresh impetus.

Technical levels to watch for