On Monday, the NZD/USD currency pair hit its highest since June 21. On Tuesday, it fell back. In early European trading, spot prices drop below 0.6300, ending a four-day run of gains.

The  NZD/USD pair doesn’t like taking risks, which is hurt by how cautious everyone is. Market morale is low because people are worried about a global recession. Also, investors are worried about what will happen when Nancy Pelosi goes to Taiwan.

Anti-risk flows help the US dollar recover from its lowest level since July 5, which puts pressure on the NZD/USD pair. Expectations that the Fed won’t raise interest rates as quickly as expected and falling yields on US Treasury bonds could slow the recovery of the USD. This could make NZD/USD stronger.

Before saying that the recent rise of the NZD/USD pair from 0.6060, over a two-year low in July, has run out of steam, wait for strong selling to continue. People in the market are waiting for the June JOLTS Job Openings data to come out later in the North American morning session.

Conclusion

Before New Zealand’s quarterly jobs report on Wednesday, traders will look at how the market feels about the risk to see what the NZD/USD pair might do in the short term.