- NZD/USD clings to modest daily gains in late American session.
- US Dollar Index struggles to stage a meaningful rebound.
- Risk-averse market environment makes it difficult for NZD to gather further strength.
The NZD/USD pair advanced to a fresh daily high of 0.72222 in the early American session but struggled to preserve its bullish momentum. As of writing, the pair was up 0.33% on the day at 0.7212 and was on track to snap a two-day losing streak.
USD remains on the back foot
Earlier in the day, the broad-based selling pressure surrounding the USD helped NZD/USD push higher. The US Dollar Index (DXY) fell to a daily low of 90.55 after the data published by the US Department of Labor showed that the weekly Initial Jobless Claims rose to 861K, compared to analysts estimate of 765K.
However, the sharp decline witnessed in major equity indexes in the US after the opening bell helped the greenback find demand and capped NZD/USD’s gains. At the moment, the S&P 500 is losing 0.55% and the DXY is down 0.35% at 90.62.
Other data from the US revealed that the Philadelphia Fed Manufacturing Index edged lower to 23.1 in February but came in better than the market expectation of 20. Finally, Housing Starts in January declined by 6% but Building Permits increased by 10.4%.
On Friday, the Producer Price Index (PPI) will be released from New Zealand. Later in the day, the IHS Markit will release the preliminary Manufacturing and Services PMI reports for the US. Nevertheless, the USD’s market valuation is likely to remain the primary drivers of NZD/USD’s movements ahead of the weekend.
Technical levels to watch for
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