- NZD/USD staged a modest rebound after dropping to two-week lows.
- US Dollar Index clings to small daily gains above 93.50.
- Focus shifts to FOMC Chairman Powell’s testimony, RBNZ policy announcements.
The NZD/USD pair lost more than 100 pips on Monday and extended its slide to a fresh two-week low of 0.6639 on Tuesday. With investors opting out to stay on the sidelines ahead of key macroeconomic events, the pair started to consolidate its losses and was last seen gaining 0.23% on the day at 0.6682.
DXY stays quiet ahead of Powell’s testimony
The risk-averse market environment provided a boost to the greenback at the start of the week. The US Dollar Index (DXY) advanced to 93.78 on Monday and closed 0.6% higher at 93.55. Ahead of FOMC Chairman Jerome Powell’s and US Treasury Secretary Mnuchin’s testimony before the House Financial Services Committee, the DXY is staying flat on the day above 93.50.
Meanwhile, Existing HomeSales and Richmond Fed Manufacturing Index will be featured in the US economic docket on Tuesday.
On the other hand, the Reserve Bank of New Zealand (RBNZ) will release its Rate Statement and Interest Rate Decision in the early trading hours of the Asian session on Wednesday.
Last week, New Zealand’s finance minister, Grant Robertson, noted that the RBNZ could keep its policy rate unchanged until March of 2021 if the economic recovery were to be stronger than expected. If the RBNZ adopts a natural tone as suggested by the finance minister, it could help the NZD gather strength against its rivals.
Technical levels to watch for
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