- The NZD/USD pair snapped the 12-day winning streak on Monday.
- US Dollar Index preserves Monday’s gains, remains below the 97 handle.
- The AUD/USD sharp upsurge helps the pair limit its losses.
After closing the day in the negative territory for the first time since June 16 on Monday, the NZD/USD pair dropped to its lowest level in a week at 0.6657 earlier today but retraced its fall to turn flat on the day at 0.6670.
During the Asian trading hours, the NZIER Business Confidence in New Zealand slumped to -34% in the second quarter from -29% in the first quarter to weigh on the kiwi. On the other hand, building permits increased by 13.2% on a monthly basis in May following April’s contraction of 7.9% but failed to help the kiwi gain traction.
Meanwhile, the Reserve Bank of Australia announced its decision to cut its policy rate to 1% from 1.25% as expected. However, the fact that the RBA adopted a cautious tone in its statement but refrained from committing to more rate cuts helped the AUD outperform its rivals with the AUD/USD pair climbing to the 0.70 mark and helping the positively-correlated NZD/USD pair limit its losses.
On the other hand, the US Dollar Index, which rose 0.7% on Monday boosted by rising Treasury bond yields and the better-than-expected Manufacturing PMI readings, stays in a consolidation phase on Tuesday amid a lack of fresh fundamental drivers. At the moment, the DXY is down 0.1% on the day at 96.70. Later in the session, the ISM-NY Business Conditions Index will be featured in the U.S. economic docket. During the Asian trading hours, the ANZ Commodity Price will be the only data release from New Zealand.
Technical levels to watch for
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