NZD/USD consolidates gains below 0.7000 after RBNZ-inspired rally
- NZD/USD rose above 0.7000 for the first time since June 2018.
- RBNZ is advised to add house prices to its mandate.
- US Dollar Index turns south after closing in the positive territory on Monday.
The NZD/USD pair closed the first day of the week virtually unchanged at 0.6920 but rose sharply during the Asian trading hours to touch its highest level since June 2018 at 0.7006. The pair seems to have gone into a consolidation phase ahead of the American session and was last seen gaining 0.97% on the day at 0.6987.
RBNZ is asked to consider house prices when deciding on policy
Earlier in the day, New Zealand's finance minister, Grant Robertson, said the Reserve Bank of New Zealand (RBNZ) should think about adding the stability in house prices into its mandate.
Commenting on this development, MUFG Bank analysts argued that market participants could speculate that the housing market could overheat and "prompt the RBNZ to scale back easing sooner than major central banks thereby boosting demand for the kiwi."
Meanwhile, the upbeat market mood continues to weigh on the greenback and helps NZD/USD preserve its bullish momentum.
Ahead of the Housing Price Index and the Conference Board's Consumer Confidence Index data, the US Dollar Index is down 0.27% on the day at 92.25. Reflecting the risk-on market environment, the S&P 500 Futures are up 0.8% on the day at 3,604.
In the early trading hours of the Asian session, RBNZ Governor Adrian Orr will be delivering a speech and investors will keep a close eye on the governor's comments on the housing market.
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.
