NZD/USD rebounds from multi-month lows, closes in on 0.7000
- NZD/USD is rising modestly following a three-day drop.
- US Dollar Index stays relatively quiet around 92.80.
- Investors await mid-tier data releases from the US.
The NZD/USD pair closed the previous three trading days in the negative territory and touched its lowest level in more than four months at 0.6942 on Thursday before staging a rebound on Friday. As of writing, the pair was up 0.47% on the day at 0.6982.
Focus shifts to US data
The positive shift witnessed in market sentiment seems to be helping the kiwi find demand on Friday while making it difficult for the US Dollar Index (DXY) to extend its rally. Reflecting the risk-on market environment, major European equity indexes are gaining between 0.6% and 0.9%. Furthermore, the S&P 500 Futures are up 0.3%.
Boosted by the upbeat fourth-quarter GDP and the weekly Initial Jobless Claims data on Thursday, the DXY reached its highest level since November at 92.91 but seems to have gone into a consolidation phase ahead of the weekend. Nevertheless, with the 10-year US Treasury bond yield rising more than 2%, the DXY is staying flat around 92.80 and limiting NZD/USD upside for the time being.
Later in the session, the US Bureau of Economic Analysis will release the Personal Spending, Personal Income and Personal Consumption Expenditures (PCE) Price Index data for February. If these readings come in stronger than expected, the USD could regather its strength and force NZD/USD to start retracing its recovery.
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.
