NZD/USD consolidates gains below 0.7000 after RBNZ-inspired rally
|- NZD/USD rose above 0.7000 for the first time since June 2018.
- RBNZ is advised to add house prices to its mandate.
- US Dollar Index turns south after closing in the positive territory on Monday.
The NZD/USD pair closed the first day of the week virtually unchanged at 0.6920 but rose sharply during the Asian trading hours to touch its highest level since June 2018 at 0.7006. The pair seems to have gone into a consolidation phase ahead of the American session and was last seen gaining 0.97% on the day at 0.6987.
RBNZ is asked to consider house prices when deciding on policy
Earlier in the day, New Zealand's finance minister, Grant Robertson, said the Reserve Bank of New Zealand (RBNZ) should think about adding the stability in house prices into its mandate.
Commenting on this development, MUFG Bank analysts argued that market participants could speculate that the housing market could overheat and "prompt the RBNZ to scale back easing sooner than major central banks thereby boosting demand for the kiwi."
Meanwhile, the upbeat market mood continues to weigh on the greenback and helps NZD/USD preserve its bullish momentum.
Ahead of the Housing Price Index and the Conference Board's Consumer Confidence Index data, the US Dollar Index is down 0.27% on the day at 92.25. Reflecting the risk-on market environment, the S&P 500 Futures are up 0.8% on the day at 3,604.
In the early trading hours of the Asian session, RBNZ Governor Adrian Orr will be delivering a speech and investors will keep a close eye on the governor's comments on the housing market.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.