NZD/USD posts modest losses below 0.7250 as markets await Powell's speech
- NZD/USD is trading in a relatively narrow band on Thursday.
- Sour market mood is helping USD find demand.
- Focus shifts to FOMC Chairman Powell's speech at 1705 GMT.
The NZD/USD pair staged a modest rebound following Wednesday's decline but failed to preserve its momentum. As of writing, the pair was posting small daily losses at 0.7242.
Earlier in the day, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said that they need to have stimulatory monetary conditions in order to achieve their mandate and added that there is still health-related economic uncertainty. These comments made it difficult for the kiwi to gather strength against its rivals during the first half of the day.
USD capitalizes on safe-haven flows
On the other hand, the risk-averse market environment is providing a boost to the greenback on Thursday and not allowing NZD/USD to gain traction. The US Dollar Index is currently up 0.25% on the day at 91.16.
Reflecting the cautious market mood ahead of FOMC Chairman Jerome Powell' speech on the US economy at the Wall Street Journal jobs summit at 1705 GMT, the S&P 500 Futures are losing 0.3%.
Powell Preview: Three scenarios for the Fed to defuse the bond bonfire, market implications.
Later in the day, the US Department of Labor's weekly Initial Jobless Claims report and the US Census Bureau's January Factory Orders data will be featured in the US economic docket as well.
There won't be any macroeconomic data releases from New Zealand on Friday and the USD's market valuation is likely to remain the primary driver of NZD/USD's movements in the near term.
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.
