- NZD/USD remains under bearish pressure following Thursday’s slide.
- US Dollar Index trades at weekly highs above 90.50.
- Focus shifts to key macroeconomic data releases from the US.
The NZD/USD pair lost more than 60 pips on Thursday after the USD started to gather strength in the late American session. On Friday, the pair continues to push lower and was last seen losing 0.7% on the day at 0.7320.
DXY edges higher ahead of key data
The sharp upsurge witnessed in the US Treasury bond yields following the 7-year note auction provided a boost to the greenback. The US Dollar Index (DXY), which dropped to its lowest level in nearly 8 weeks, staged a decisive rebound and closed in the positive territory on Thursday supported by a more-than-10% increase in the benchmark 10-year US T-bond yield.
Ahead of key macroeconomic data releases, the DXY preserve its bullish momentum and is currently rising 0.5% on the day at 90.58, the highest level in a week.
On Friday, the US Bureau of Economic Analysis will publish the Personal Consumption Expenditures (PCE) Price Index data. Markets expect the Core PCE Price Index, the Federal Reserve’s preferred gauge of inflation, to arrive at 1.4% on a yearly basis in January. A stronger-than-expected reading could allow the USD to gather additional strength as the higher inflation expectations remain the primary driving force of US T-bond yields.
Other data releases from the US will include Personal Spending, Personal Income, Goods Trade Balance and the University of Michigan’s Consumer Sentiment Index.