NZD/USD retreats below daily highs near 0.6960 on dismal economic data

NZD/USD extends the previous session’s gains on Tuesday in Asian session. The selling pressure in the US dollar pushes the pair higher. At the time of writing, NZD/USD is trading at 0.6960, down 0.02% for the day,

The US Dollar Index (DXY), which measures the greenback performance against its six major rivals, fell near 93.80 with 0.24% losses despite higher US 10-year benchmark yields. The US Treasury yields trade at 1.48%, after touching 1.56% its highest point since June in the previous week. The greenback failed to capitalize on the upbeat economic data, the New Orders for US manufactured goods rose 1.2% in August, beating the market expectations of 1%. Meanwhile, the US President Joe Biden said he does not guarantee that the government will not breach its $28.4 trillion debt limit unless Republicans join Democrats in voting to raise it.

On the other hand, Kiwi lost its momentum on reduced risk appetite among investors in the wake of the renewed COVID-19 restrictions and dismal economic data. As per the latest NZIER Quarterly Survey of Business Opinion (QSBO), the Business Confidence drops to -11% vs +7% in Q3 whereas the Capacity Utilisation came at 96.1% as compared to 94.9% in Q2. 

In addition to that, New Zealand Prime Minister Jacinda Arden is expected to decide whether Auckland will move out of alert level 3, after 29 new infections were reported on Monday. It is worth noting that S&P 500 Futures were trading at 4,294, down 1.15% for the day.

As for now, all eyes are on the US Balance of Trade, ISM Non-Manufacturing PMI, and Market Service PMI to take fresh trading impetus.

NZD/USD additional levels