NZD/USD pares majority of daily gains, trades around 0.7070 ahead of US data
|- NZD/USD lost its traction before reaching 0.7100 on Friday.
- US Dollar Index consolidates Thursday's rally below 93.00.
- Focus shifts to September UoM Consumer Sentiment Index data.
The NZD/USD pair fell to its lowest level in 16 days at 0.7063 on Thursday and staged a modest recovery in the first half of the day on Friday. However, the pair lost its momentum before reaching 0.7100 and erased a large portion of its daily gains. As of writing, the pair was up 0.1% at 0.7070.
DXY stays calm below 93.00
The renewed USD strength in the second half of the week forced NZD/USD to remain under strong bearish pressure. Fueled by the robust August Retail Sales report and rising US Treasury bond yields, the US Dollar Index (DXY) advanced to its strongest level since late August at 92.96 on Thursday before going into a consolidation phase.
Ahead of the University of Michigan's preliminary September Consumer Sentiment Index data, the DXY is posting small daily losses at 92.80.
Earlier in the day, the data from New Zealand showed that the Business NZ PMI fell to 40.1 in August from 62.6 in July but this disappointing print was largely ignored by market participants.
In the meantime, Wall Street's main indexes remain on track to open little changed on Friday, suggesting that the risk sentiment will not be able to provide a directional clue to NZD/USD ahead of the weekend.
Technical levels to watch for
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