NZD/USD climbs above 0.6560 on broad USD weakness
- NZD/USD started the new week on a strong footing.
- Upbeat data from China helped NZD gather strength on Monday.
- US Dollar Index pushes lower following last week's impressive rally.
The NZD/USD pair lost more than 200 pips last week but staged a rebound on Monday. As of writing, the pair was up 0.3% on a daily basis at 0.6562.
Risk flows hurt USD on Monday
The broad-based USD weakness at the start of the week seems to be helping the pair retrace its losses. The US Dollar Index, which rose 1.7% last week, is down 0.4% at 94.21. In the absence of significant macroeconomic data releases, risk sentiment seems to be impacting the USD's performance against its rivals.
Reflecting the upbeat market mood, major European equity indexes are up between 1.5% and 2.7%. Additionally, S&P 500 futures are gaining 1.35%, suggesting that Wall Street could open sharply higher and further weigh on the safe-haven USD in the second half of the day.
Meanwhile, the data from China over the weekend showed that industrial profits in August surged by 19.1% on a yearly basis in August to $89.8 billion and helped the China-proxy kiwi gain its footing in the early Asian session.
The only data featured in the US economic docket On Monday will be the Dallas Fed Manufacturing Business Index. Investors, however, are likely to ignore this data and remain focused on markets' risk perception. There won't be any data releases from New Zealand on Tuesday.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
