NZD/USD witnessed some heavy selling on Thursday and dropped to fresh weekly lows

The NZD/USD pair continued losing ground through the early European session and dropped to fresh weekly lows, around the 0.6965 region in the last hour. The NZD/USD pair witnessed heavy selling on Thursday and retreated further from near three-week tops, or levels just above the 0.7100 mark touched earlier this week. The sharp intraday decline was sponsored by a modest US dollar strength and a sharp deterioration in the global risk sentiment, which tends to dent demand for the perceived riskier kiwi. The USD held steady near three-month tops and was underpinned by the FOMC minutes, which indicated that the Fed is moving towards tightening its monetary policy as soon as this year. Fed officials agreed that they must be ready to act if inflation or other risks materialize, suggesting that QE tapering discussions could begin in the coming months.

Nevertheless, the pair has now moved well within the striking distance of last week's lows around the 0.6945 region. This is followed by YTD through near the 0.6925 area, which if broken will be seen as a fresh trigger for bearish traders and set the stage for the resumption of the NZD/USD pair's recent downward trajectory witnessed over the past one month or so. Market participants now look forward to the US Initial Weekly Jobless Claims data, due for release later during the early North American session. This, along with the broader market risk sentiment, will influence the USD price dynamics and allow traders to grab some short-term opportunities around the NZD/USD pair.