NZD/USD extends rebound above 0.7170 amid broad USD weakness
- NZD/USD looks to snap a four-day losing streak.
- US Dollar Index retreats to 92.00 area as US T-bond yields stage a deep correction.
- NFIB Business Optimism Index in US improved modestly in February.
The NZD/USD closed the fourth straight day in the negative territory on Monday but staged a decisive rebound during the first half of the day on Tuesday. As of writing, the pair was up 0.65% on the day at 0.7174.
DXY turns south following Monday's rally
The heavy selling pressure surrounding the greenback seems to be fueling NZD/USD recovery. The US Dollar Index, which touched a fresh multi-month high of 92.50 earlier in the day, is currently down 0.4% at 91.98. The sharp correction witnessed in the US Treasury bond yields is making it difficult for the USD to find demand. The benchmark 10-year US T-bond yield is losing more than 4% ahead of the American session.
The only data from the US on Tuesday revealed that the NFIB Business Optimism Index in February improved to 95.8 from 95 in January but this reading was largely ignored by market participants. Meanwhile, the S&P 500 Futures are up more than 1%, suggesting that the USD will remain depressed with risk flows dominating financial markets.
Earlier in the day, the ANZ Activity Outlook from New Zealand arrived at 17.4% in February, compared to 21.3% in January.
On Wednesday, Electronic Card Retail Sales will be released from New Zealand but the greenback's market valuation is likely to continue to dominate NZD/USD's movements.
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.
