NZD/USD remains poised to extend losses beyond 0.7000 on USD gains
- NZD/USD continues with the previous week’s selling pressure on Monday.
- US Dollar Index remains steady near 93.0 on stronger NFP report.
- Upbeat Chinese Trade data and interest rate hike expectations keep New Zealand’s dollar grounded.
NZD/USD extends the previous session's downside momentum in the Asian session on the first day of the fresh trading week.
The pair witnessed heavy selling pressure in the American session and retreated further from daily highs, the levels just below the 0.7100 mark, touched earlier in the previous week.
The buying pressure in the US Dollar Index (DXY), which measures the greenback performance against its six major rivals, drags NZD/USD toward the lower levels. The DXY trades steady above 92.70 amid a rise in US Treasury yields.
The yield on the benchmark 10-year Treasury bonds scaled up to 1.30% on better than expected unemployment data, which fuels the economic growth prospects despite the threat of rising delta strain.
The US economy added 943k jobs in July, beating the market expectations of 870k. Most of the jobs were created in the service sector, which was the hardest hit during the COVID-19 pandemic.
Meanwhile, US Senate moved gradually toward formalizing a $1 trillion bipartisan infrastructure bill. This also added to the optimism surrounding the greenback.
In addition to that, the increasing corona cases in the Asia-Pacific region underpins the demand of the US dollar on the back of its global safe-haven asset.
On the other hand, Kiwi was able to hold near 0.7000 on better Chinese trade balance data, which instil faith in the pace of recovery in its largest trade partner.
Investors are anticipating the rate hike from the Reserve Bank of New Zealand( RBNZ) at its August 18 meeting.
As for now, all eyes are on Chinese CPI data to gauge the market sentiment.
NZD/USD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
