NZD/USD climbs to a new weekly high, bulls attack 0.7100
- NZD/USD threatens to break above 0.7100 amid upbeat market sentiment.
- US stocks are rising, weighing on the US dollar.
- A good New Zealand’s Trade Balance reading can propel the NZD/USD higher.
Earlier in the mid-European session, the pair was trading within a narrow range of 0.7040-0.7058. But once the New York session kicked in, the kiwi rose nearby 0.7100. The NZD/USD is up 1.03% during the day, trading at 0.7083 at the time of writing.
The cause of the move lies in the back of the US dollar. The US Dollar Index which tracks the buck's performance against six currencies, is down almost half percent, sitting at 93.02 amid a positive market mood. Major global stock indices rose. The S&P 500 and the Dow Jones post gains of 1.24% and 1.54% each in the US. Additionally, China's fears regarding Evergrande, wane as risk appetite improves.
In the US, the Initial Jobless Claims, for the week ending on September 18, increased to 351K, worse than the 320K expected by analysts. Despite the federal pandemic benefits completed on September 6, job applications had not improved, reported employers.
Moreover, the White House has said that it would not extend jobless aid further. However, states across the country can still use pandemic relief funds to assist unemployed citizens.
On Friday, Statistics of New Zealand will release the Trade Balance on a yearly and a monthly basis of August. Additionally, Imports and Exports could also give direction to the NZD/USD during the Asian session.
Meanwhile, in the US economic docket, the New Home Sales for August are expected at 0.7M, trailing the previous month’s reading of 0.708M.
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Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
