- NZD/USD pair gained nearly 70 pips in a matter of minutes.
- US Dollar Index continues to fluctuate in tight range above 99.50.
- US manufacturing activity contracted at a softer pace than expected in March.
After trading in a narrow band near the 0.5900 during the early American session, the NZD/USD pair quickly rose to a daily high of 0.5967 in the last hour. There were no apparent catalysts behind that sudden jump and the pair erased a large portion of its gains to trade around 0.5940 at the time of press, where it was down 0.25% on the day.
USD pays no mind to US data
The data published from the US on Wednesday showed that the economic activity in the manufacturing sector contracted at a softer pace than expected with the ISM Manufacturing PMI coming in at 49.1 to beat analysts’ estimate of 45.
Meanwhile, the ADP’s monthly National Employment Report showed that the private sector employment in March declined by 27K in the US. However, the press release clarified that this reading was not reflecting the full impact of the coronavirus outbreak on the labour market as it was based on payroll records through the 12th of the month.
Nevertheless, the market reaction to these data was relatively muted. As of writing, the US Dollar Index was extending its sideways grind in the 99.50-99.70 region.
There won’t be any significant macroeconomic data releases from New Zealand or China on Thursday and the USD’s market valuation is likely to continue to drive the pair’s action.
Technical levels to watch for
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