- NZD/USD is fluctuating in a relatively tight range on Tuesday.
- US Dollar Index is posting modest daily gains above 90.00.
- Investors await FOMC Chairman Jerome Powell’s testimony at 1500 GMT.
The NZD/USD pair closed the third straight day in the positive territory and touched its highest level since April 2018 at 0.7345 on Monday. With the trading action turning subdued on Tuesday, the pair seems to have gone into a consolidation phase and was last seen losing 0.11% on the day at 0.7320.
USD selloff takes a break ahead of Powell’s testimony
The broad-based selling pressure surrounding the greenback provided a boost to NZD/USD at the start of the week. The US Dollar Index (DXY) dropped below 90.00 for the first time in more than a month during the Asian trading hours on Tuesday but staged a modest rebound. At the moment, the DXY is up 0.13% at 90.13.
Later in the day, the Conference Board’s Consumer Confidence Index and the Federal Reserve Bank of Richmond’s Manufacturing Index will be looked upon for fresh impetus.
More importantly, FOMC Chairman Jerome Powell’s semi-annual testimony before the Senate Banking Committee will be watched closely by market participants.
Powell’s comments on the latest upsurge witnessed in US Treasury bond yields and concerns over an uncontrolled increase in inflation could ramp up the volatility in the second half of the day. If Powell downplays inflation worries and reaffirms the Fed’s dovish stance, the greenback could have a tough time finding demand and allow NZD/USD to regain its traction.