NZD/USD pares early gains, turns flat near 0.7060 ahead of US data
- NZD/USD touched its highest level since May 2018 at 0.7085.
- US Dollar Index recovers modestly, stays below 91.50.
- Investors await mid-tier macroeconomic data releases from the US.
The NZD/USD pair climbed to its highest level since May 2018 at 0.7085 on Wednesday but seems to have gone into a consolidation phase ahead of mid-tier macroeconomic data releases. As of writing, the pair was virtually unchanged on the day at 0.7063.
DXY finds support before testing 91.00
The broad-based selling pressure surrounding the greenback since the start of the week provided a boost to NZD/USD. The risk-on market environment, as reflected by surging equity indexes in the US, made it difficult for the USD to find demand. The US Dollar Index (DXY) slumped to its lowest level in 30 months at 91.10 on Wednesday and staged a technical rebound. At the moment, the DXY is up 0.05% on the day at 91.36.
Earlier in the day, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said that they are focused on being operationally ready to implement negative rates if necessary and kept kiwi's upside limited.
Later in the session, the ADP Employment Change and the ISM-NY Business Conditions Index will be featured in the US economic docket.
Meanwhile, the S&P 500 Futures are down 0.2% on the day, suggesting that the DXY could edge higher in the second half of the day if Wall Street's main indexes push lower.
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.
