NZD/USD bulls moved in during risk-on US session

• NZD/USD corrects a portion of the US dollar's advance in risk-on markets. 
• Markets will be on the watch for Fed speakers this week and ongoing USD strength risks. 

NZD/USD is opening in early Asia almost 1% higher as the bulls step in to correct, in part, the dollar's advance as risk appetite improved.

On Wall Street, equities rebound and US bond yields were rising with a pull-back in the greenback cited as the catalysts for the moves.

''While the move was mostly USD-driven and it’s too soon to say whether it’s just a pull-back off highs (for the USD), NZD price action nonetheless looks a little more encouraging,'' analysts at ANZ Bank argued. 

There was some back-peddling from Federal Reserve speakers in the US session with comments coming from members of the board, including comments from both St. Louis Fed President James Bullard and New York Fed Pres John Williams and Dallas Fed's Robert Kaplan.

• NY Fed Pres Williams: Economy hasn't improved enough to pare policy stimulus

• Fed's Kaplan: Policymakers reacting to dramatically improved economic outlook

Bullard said that he doesn't see how rates can get substantially higher than they are in the EU or Japan, but he did say that there is the possibility of the Fed hiking before tapering was complete. 

With regards to that comment in particular, 'while technical, it was more hawkish and if that’s the tone we get for the remainder of the week, it’s hard to see the USD softening too much or US inflation expectations coming back a long way,'' the analysts at ANZ Bank argued.

The Fed chair Jerome Powell speaks before US lawmakers on Tuesday to give them an update on the Fed’s support for the economy through the pandemic.

At a crossroad short-term, but longer-term we still expect it to strengthen, fuelled by decent growth and commodity gains.