NZD/USD drops to fresh multi-month lows near 0.6230 ahead of US data dump
- US Dollar Index rebounds from multi-week lows, closes in on 98.50.
- Coronavirus headlines continue to impact financial markets on Friday.
- Coming up: PCE Price Index, Trade Balance and Consumer Confidence data from US.
After closing the previous day with small gains above the 0.6300 handle, the NZD/USD pair lost its traction on Friday and suffered heavy losses as the dismal market mood weighed on the risk-sensitive kiwi. As of writing, the pair was trading at its lowest level since October at 0.6230, erasing 1.2% on a daily basis.
Heightened concerns over the coronavirus outbreak having a long-lasting negative impact on the global economy force investors to stay closer to safe-haven assets. The 10-year US Treasury bond yield renewed its all-time low on Friday and major European stocks are suffering heavy losses.
USD rebounds ahead of key data
Although the broad-based USD weakness helped the pair limit its losses earlier in the day, a technical recovery witnessed in the US Dollar Index (DXY) seems to be putting additional weight on the pair's shoulders.
Later in the session, the US Bureau of Economic Analysis will release the annual core PCE Price Index, the Fed's preferred gauge of inflation, Personal Income and Personal Spending data. UoM Consumer Confidence Index and Trade Balance will be also featured in the US economic docket. Ahead of these data, the DXY is virtually unchanged on the day at 98.40.
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.
