NZD/USD stays in the negative territory below 0.7200 as focus shifts to US data
- NZD/USD is edging lower after closing higher on Wednesday.
- US Dollar Index fluctuates in tight range above 91.00.
- Weekly Initial Jobless Claims and Existing Home Sales data from US coming up next.
The NZD/USD pair managed to post modest gains on Wednesday but struggled to preserve its bullish momentum. As of writing, the pair was down 0.25% on a daily basis at 0.7194.
With Wall Street's main indexes gaining traction and jumping higher on Wednesday, the greenback struggled to find demand as a safe haven and the US Dollar Index (DXY) finished the day in the negative territory. As major European equity indexes preserve a firm footing on Thursday, the DXY fails to stage a rebound and was last seen losing 0.1% at 91.04.
In the meantime, following an earlier decline, the 10-year US Treasury bond yield is now attempting recovery and gaining 0.55% at 1.566%, helping the USD limit its losses for the time being. Moreover, the S&P 500 Futures are down 0.1%, suggesting that a negative shift in market sentiment could be seen in the second half of the day.
The weekly Initial Jobless Claims, Chicago Fed National Activity Index, Existing Home Sales and Kansas Fed Manufacturing Index data will be featured in the US economic docket later in the day. On Friday, March Credit Card Spending data from New Zealand will be looked upon for fresh impetus.
NZD/USD outlook
Westpac analysts think that NZD/USD could continue to push higher in the near term. “Having broken above the key 0.7100 level last week, NZD/USD is poised to continue higher. First clearing 0.7230, and then 0.7270, to allow a move to 0.7300+. The main drivers recently have been stronger global risk sentiment and a weaker US dollar," analysts noted.
“Multi-month, we remain bullish NZD/USD, expecting 0.7600 by year-end. The main factors are likely to be a weaker US dollar (due to improving global growth relative to the US) and upbeat global risk sentiment," they added.
Additional 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.
