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The dollar is finding itself on the backfoot as we are seeing a continuation to Friday's moves take shape. Month-end flows may also be part of the picture but keep an eye out for that more so when we approach the London fix later in the day.
For now, risk trades are breathing easier once again as the post-Jackson Hole momentum continues to gather pace to kick start the new week.
With the NZ virus situation seemingly kept under control, this is starting to reignite more hawkish undertones in the kiwi dollar. And there's good reason to keep banking on that, with the policy divergence play returning to the picture.
AUD/NZD is down to fresh lows for the year below 1.0400 and NZD/JPY looks poised for a test of its 100-day moving average once again near 77.66 this week.
Despite the dollar's sluggishness over the past few sessions, any material weakness is unlikely to come by especially when the Fed is still on track to taper by year-end.
When viewing the dollar index, topside may be limited closer to 93.00 for now while downside should also be limited closer to the key daily moving averages between 91.32 to 91.60.
That sets out a bit of a range to play with before the FOMC meeting and is not helped by the meandering mood in Treasury yields.
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