- NZD/USD is falling for the second straight day.
- US Dollar Index recovers above 91.00 on Monday.
- Wall Street’s main indexes look to open in the negative territory.
After climbing to its highest level since April 2018 at 0.7106, the NZD/USD pair staged a technical correction and registered modest losses on Friday. With investors turning cautious at the start of the week, the pair continued to edge lower and was last seen losing 0.35% on the day at 0.7020.
DXY rebounds on the back of risk-off flows
Last week, the US Dollar Index (DXY) lost more than 1% as the greenback struggled to find demand amid risk flows. However, renewed concerns over the EU and the UK failing to reach a trade deal caused major European currencies to lose strength and helped the USD start erasing its losses. At the moment, the DXY is up 0.37% on the day at 91.04.
Confirming the sour market mood, the S&P 500 Futures are down 0.45% on the day at 3,681, suggesting that Wall Street’s main indexes could open in the negative territory on Monday and allow the DXY to preserve its bullish momentum.
Meanwhile, the data from China showed on Monday that the trade surplus in November expanded at a more robust pace than expected but was largely ignored by market participants.
There won’t be any significant macroeconomic data releases from the US in the remainder of the day and the risk sentiment could continue to impact NZD/USD’s movements.
Technical levels to watch for