NZDUSD remains depressed below 0.7050, US dollar rebounds
|- NZD/USD moves cautiously in the initial Asian trading hours.
- US dollar recovers from early losses and stays above 91.80.
- Kiwi gains support from improved risk appetite, RBNZ may cease QE bond purchase.
NZD/USD treads water on Tuesday in the early Asian trading session. The pair recovers part of its previous day’s losses.
At the time of writing, the NZD/USD pair is trading at 0.7048, up 0.16% for the day.
The rebound in the US Dollar Index (DXY) from the lower levels keeps gains limited for NZD/USD.
The US Treasury yields trades below 1.5% as investors continue to digest sharp increases in the Personal Consumption Expenditure Index (PCE), Fed’s key inflation indicator. The PCE jumped 3.4% in May compared to the previous year.
On the other hand, Kiwi gained as risk sentiment improved after a breakthrough in infrastructure deal talks in Washington in the earlier week.
Meanwhile, as per Westpac's Chief Economist Michael Gordon, New ealnd’s housing market will cool down significantly over the coming month in the next 12 months due to change in tax structures.
In addition to that, the Bank of New Zealand said that New Zealand’s central bank might end its QE easing program in the coming months as it prepares to raise interest rates. This, in turn, provides lower ground to the kiwi.
It is worth noting that S&P 500 Futures were trading at 4,281 with 0.23% gains.
As for now, the dynamics around the US dollar continue to influence the pair’s performance in the absence of any major fundamental catalyst.
NZD/USD additional levels
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