NZD/USD clings to modest daily gains above 0.6700
|- NZD/USD pulled away from 12-day highs in American session.
- US Dollar Index pared early losses and turned flat above 93.00.
- GDT Price Index in New Zealand rose by 3.6% in latest auction.
The NZD/USD pair rose to its highest level since early September at 0.6737 on Tuesday but retreated modestly during the American trading hours. As of writing, the pair was up 0.3% on the day at 0.6720.
On Tuesday, the risk-on market environment weighed on the greenback and helped the pair push higher. Additionally, the upbeat data from China, which showed that Industrial Production and Retail Sales increased at a stronger pace than expected in August, provided a boost to the China-sensitive kiwi.
DXY recovers above 93.00
In the early trading hours of the American session, however, the US Dollar Index (DXY) staged a rebound and turned flat above 93.00. Although there were no significant macroeconomic data releases featured in the US economic docket, the latest headlines surrounding the US-China trade seem to have allowed the USD find demand as a safe-haven.
In a report published on Tuesday, the World Trade Organization (WTO) said that the US' tariffs on China's imports were not justified and recommended that the US "brings its measures into conformity."
Meanwhile, the Global Dairy Trade (GDT) Price Index rose by 3.6% following the bi-weekly auction in New Zealand and supported the kiwi.
On Wednesday, second-quarter Current Account data will be released from New Zealand. Nevertheless, the market reaction is likely to remain muted with investors getting ready for the FOMC's monetary policy announcements later in the day.
Technical levels to watch for
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