NZD/USD consolidates in a range, holds comfortably above mid-0.7000s
|- NZD/USD was seen oscillating in a range through the first half of the Asian session.
- A sluggish start in the Asian equity markets capped gains for the perceived riskier kiwi.
- An uptick in the US bond yields underpinned the USD and did little to impress bulls.
The NZD/USD pair lacked any firm directional bias and remained confined in a range just below two-week tops, around the 0.7065 region through the first half of the Asian session.
A combination of factors failed to assist the pair to build on the previous day's solid bounce from the key 0.7000 psychological mark and led to a subdued/range-bound price action on Wednesday. A sluggish open in the Asian equity markets was seen as one of the key factors that kept a lid on any meaningful upside for the perceived riskier kiwi.
On the other hand, a modest uptick in the US Treasury bond yields extended some support to the US dollar, which further collaborated towards capping gains for the NZD/USD pair. The greenback was further supported by the prospects for a relatively faster US economic recovery from the pandemic amid the impressive pace of coronavirus vaccinations.
This, along with US President Joe Biden's infrastructure spending plan of more than $2 trillion, has been fueling speculations about an uptick in US inflation. This, in turn, raised doubts that the Fed will retain ultra-low interest rates for a longer period. Hence, the focus will remain on the release of the FOMC meeting minutes, due later this Wednesday.
Investors will look for clues if the conditions to begin tightening were discussed, which should continue to underpin the greenback. Apart from this, a scheduled speech by Fed Chair Jerome Powell on Thursday will play a key role in influencing the USD in the near term and assist traders to determine the next leg of a directional move for the NZD/USD pair.
Technical levels to watch
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.