NZD/USD drops to fresh multi-week lows below 0.6600
- NZD/USD is falling for the third straight day on Wednesday.
- RBNZ left its policy unchanged in September as expected.
- US Dollar Index stays calm near 94.00 ahead of PMI data.
The NZD/USD pair spiked to a daily high of 0.6646 during the Asian trading hours but quickly reversed its direction. As of writing, the pair was trading at its lowest level since August 26th 0.6590, losing 0.65% on a daily basis.
RBNZ commentary hurts NZD
Earlier in the day, the Reserve Bank of New Zealand left its policy rate unchanged at 0.25% and kept its quantitative easing program steady at NZD100 billion, as expected. In its policy statement, however, the RBNZ noted that it is prepared to lower the policy rate to provide additional stimulus if required and triggered a NZD selloff.
On the other hand, the US Dollar Index (DXY) doesn't seem to be looking to stage a technical correction following the decisive rally witnessed in the last two days. At the moment, the DXY, which touched its highest level in nearly two months at 94.25 on Wednesday, is staying flat on the day at 94.00.
Later in the session, the IHS Markit will release the September (preliminary) Manufacturing and Servces PMI reports for the US. Lately, the greenback has been reacting in a positive way to upbeat macroeconomic data releases from the US, suggesing that better-than-expected PMI reading could further weigh on NZD/USD.
Moreover, FOMC Chairman Jerome Powell will be testifying before Congress at 1400 GMT. Powell is not expected to deliver any surprising comments on the policy outlook.
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.
