NZD/USD clings to modest daily gains, stays below 0.7200
- NZD/USD fell for the third straight trading day on Monday.
- US Dollar Index stays relatively quiet around mid-90.00s.
- US Treasury bond yields continue to push higher on Tuesday.
The NZD/USD pair dropped to its lowest level in more than 10 days at 0.7146 on Monday but seems to have gone into a consolidation phase on Tuesday. As of writing, the pair was up 0.22% on the day at 0.7176.
DXY rally loses steam on Tuesday
The broad-based USD strength at the start of the week forced NZD/USD to stay under strong bearish pressure. The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, climbed to its highest level since late December at 90.72 on Monday fueled by rising US Treasury bond yields.
On Tuesday, the benchmark 10-year US T-bond yield is rising for the sixth straight day and helping the USD stay relatively resilient against its peers while keeping NZD/USD rebound limited.
Earlier in the session, the data from the US showed that the NFIB Business Optimism Index in December declined to 95.9 and missed the market expectation of 102.8. Nevertheless, this data had little to no impact on market sentiment nor the USD's market valuation.
Later in the day, the IBD/TIPP Economic Optimism Index and JOLTS Job Openings data from the US will be looked upon for fresh impetus. Additionally, investors will keep a close eye on US T-bond yields and additional gains could provide a boost to the buck in the second half of the day.
Technical levels to consider
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.
