- NZD/USD is falling for the second straight day on Friday.
- Data from New Zealand showed ongoing expansion in private sector.
- US Dollar Index stays in consolidation phase below 93.00.
The NZD/USD pair rose to its highest level in nearly 20 months at 0.6916 on Thursday but spent the second half of the day under heavy bearish pressure before closing at 0.6838. In the absence of significant fundamental drivers, the pair extended its correction on Friday and touched a daily low of 0.6811. As of writing, NZD/USD was down 0.18% on the day at 0.6825.
NZD’s RBNZ-inspired upsurge loses momentum
The Reserve Bank of New Zealand opted out to adopt a neutral tone with regards to policy outlook earlier in the week and helped the kiwi gather strength against its rivals. However, the risk-averse market environment caused the NZD to lose interest and forced the pair to start pushing lower. Wall Street’s main indexes closed in the red on Thursday and the 10-year US Treasury bond yield, which gained nearly 20% during the first half of the week, lost 10.5%.
Meanwhile, the data from New Zealand showed that the Business NZ PMI in October fell to 51.7 from 54 in September but beat the market expectation of 46.6. This reading showed an ongoing expansion in the private sector’s business activity at a modest pace.
On the other hand, the US Dollar Index continues to fluctuate in a relatively tight range below 93.00 on Friday, helping NZD/USD limit its losses.
Later in the day, the Producer Price Index (PPI) and the University of Michigan’s Consumer Sentiment Index data from the US Will be looked upon for fresh impetus.
Technical levels to watch for
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