- NZD/USD stays dangerously close to multi-year low it touched on Tuesday.
- US Dollar Index recovers a small portion of Tuesday’s losses.
- Coming up: Private sector employment data from the United States (US).
Pressured by the broad USD strength and the heavy selling pressure surrounding the AUD, the NZD/USD pair dropped to its lowest level since August of 2015 at 0.6203 in the first half of the day on Tuesday.
The Reserve Bank of Australia announced that it cut its policy rate by 25 basis points to 0.75% and left the door open for further rate cuts in its policy statement to cause the AUD/USD pair to suffer losses. However, the disappointing Purchasing Managers’ Index (PMI) data from the United States (US) caused the Greenback to weaken against its rivals and allowed the pair to close the day virtually unchanged.
On Wednesday, the pair seems to be fluctuating in a relatively tight range amid a lack of significant macroeconomic drivers. After edging lower to 0.6220 area earlier in the session, the pair staged a recovery and was last flat on the day at 0.6243.
USD stays calm ahead of labour market data
The US Dollar Index, which tracks the USD’s value against a basket of six major currencies, fell sharply after the Institute for Supply Management (ISM) in its monthly report revealed that the economic activity contracted at a stronger pace than expected with the headline PMI dropping to its lowest level in nearly a decade at 47.8.
Ahead of the Automatic Data Processing’s Private Sector Employment data, the US Dollar Index is adding 0.05% on the day at 99.22.
Technical levels to watch for
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