NZD/USD pares early losses, trades around 0.6570
- NZD/USD staged a rebound after dropping below 0.6550.
- US Dollar Index struggles to push higher following Thursday's jump.
- Producer Price Index (PPI) will be featured in US economic docket.
The sour market mood, as reflected by the poor performance of major Asian equity indexes, weighed on the risk-sensitive NZD on Friday and dragged the NZD/USD pair to a daily low of 0.6545. Nevertheless, the pair staged a technical rebound amid subdued market action and was last seen posting small daily gains at 0.6573.
Risk perception continues to impact NZD's valuation
Earlier in the day, the data published by Statistics New Zealand showed that Electronic Card Retail Sales in June increased by 16.3% on a monthly basis. With this reading, the annual change recovered to 8% from -6%. However, the NZD failed to capitalize on the upbeat data as the market mood remained sour amid concerns over rising coronavirus cases crippling the global economic recovery.
On the other hand, the greenback gathered strength against its rivals on Thursday with the US Dollar Index (DXY) gaining 0.3% on the day. Although the DXY extended its rebound and tested 97.00 earlier in the day, it reversed its direction during the European trading hours and helped the pair erase its daily losses.
At the moment, the DXY is down 0.08% on a daily basis at 96.70. Later in the day, the Producer Price Index data from the US will be featured in the US economic docket.
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.
