NZD/USD pares early gains, trades around 0.6430
|- New Zealand and China reportedly agreed to update free trade agreement.
- US Dollar Index is posting modest gains on Monday.
- US and China are moving closer to finalizing phase one of the trade deal.
The NZD/USD pair started the new week on a strong footing and advanced to its highest level since August 14th at 0.6466 boosted by reports revealing that New Zealand and China have reached an agreement to update the free trade agreement. Citing, Radio New Zealand, Reuters reported that the new agreement includes rules to make exporting to China cheaper and easier for New Zealand.
Additionally, United States Commerce Secretary Wilbur Ross on Monday noted that they were "very far along" in trade talks with China and US envoy Robert O’Brien added that sides were close to finalizing the phase one of the trade deal.
USD rebounds after last week's fall
However, the broad-based USD strength on Monday made it difficult for the pair to preserve its bullish momentum. As of writing, the pair was virtually unchanged on the day at 0.6430. Amid a lack of fresh fundamental drivers, the US Dollar Index is making a technical correction of last week's 0.75% drop. At the moment, the index is up 0.22% on the day at 97.33
In the second half of the day, the ISM NY Business Conditions Index and Factory Orders data from the US will be featured in the economic calendar.
Technical levels to watch for
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