- NZD/USD is staging a recovery following last week’s slump.
- Risk-on market mood seems to be helping NZD find demand.
- Manufacturing PMI data will be featured in US economic docket.
The NZD/USD pair lost nearly 70 pips last week and stayed relatively quiet near 0.6600 during the Asian trading hours on Monday. With the market mood turning upbeat ahead of the American session, the pair started to edge higher and was last seen trading at fresh daily highs near 0.6630, gaining 0.18% on the day.
Eyes on US presidential election, RBA policy announcements
Earlier in the day, the only data from New Zealand revealed that Building Permits in September rose by 3.6% following July’s increase of 0.2% but was largely ignored by the market participants.
Reflecting the risk-on market environment, major European equity indexes are up between 1.2% and 1.9% on the day. Moreover, the S&P 500 futures are rising 1.4%, suggesting that Wall Street’s main indexes are likely to open the day sharply higher.
Meanwhile, the US Dollar Index, which rose more than 1% last week, is consolidating its gains near 94.00 as investors seem to be stepping to the sideline ahead of the presidential elections in the US.
Later in the session, the IHS Markit and the ISM will be releasing the Manufacturing PMI data for October. During the Asian trading hours on Tuesday, the Reserve Bank of Australia (RBA) is expected to lower its policy rate and a sharp reaction in the AUD/USD pair could impact the positively-correlated NZD/USD’s movements.
Technical levels to watch for
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