- NZD/USD is trading with modest gains in early American session.
- Rising US T-bond yields help greenback preserve its strength.
- Focus shifts to labour market report from New Zealand.
The NZD/USD pair rose to a daily high of 0.7193 in the early trading hours of the European session but struggled to preserve its bullish momentum. As of writing, the pair was posting small daily gains at 0.7162.
Unabated USD strength limits NZD/USD’s upside
The risk-positive market environment, as reflected by sharp increases seen in major European equity indexes and the US stocks futures, is helping the kiwi stay resilient against its peers on Tuesday. However, the broad-based USD strength is not allowing NZD/USD to push higher.
In the absence of significant fundamental drivers, the more-than-1% increase witnessed in the US Treasury bond yield is providing a boost to the USD. The US Dollar Index, which gained 0.45% on Monday, is currently at its highest level in nearly two months at 91.15, up 0.2% on a daily basis.
Later in the session, the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism Index will be looked upon for fresh impetus. More importantly, Statistics New Zealand will release its labour market report in the early Asian session on Wednesday. Investors expect the Unemployment Rate in the fourth quarter to rise to 5.6% from 5.3% and a better than expected reading could help the NZD start outperforming its rivals.
Technical levels to watch for
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