Another European risk-off session on Tuesday


Risk assets came under renewed selling pressure on Tuesday, with indices and commodity currencies diving. 

The NZDUSD pair was down nearly 1.5% to three-week lows at 0.6920, while the AUDUSD pair dropped 0.6% to fresh nine-month lows below 0.7280. 

Traders are getting nervous that the rising cases due to the Delta variant will cause more economic damage, and commodity currencies tend to be most sensitive to negative sentiment. 

Elsewhere, the EURUSD pair was down slightly, but it has not moved anywhere in the last month as it trades at around 1.18. The USDJPY pair has dropped notably lately as US yields fell and sentiment worsened. 

US benchmarks are down again today, but the dips are usually bought during the US session, such as yesterday. 

As long as the Fed and other central banks continue their printing presses, equities should continue in their long-term uptrends, with any short-term dips being opportunities for new entries. 

Later in the day, US retail sales are expected to decline, possibly undermining the USD, but stocks could be supported. Worsening economic data could mean the Fed will not be in a hurry to taper the QE.  
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