NZD/USD looks to close the day modestly lower below 0.6750

• Broad USD strength on Monday drags the pair lower.
• U.S. – China trade optimism helps NZD limit its losses.
• RBNZ is scheduled to release its monetary policy statement on Wednesday.

The NZD/USD pair rebounded modestly in the early Asian session but lost its traction and turned negative on the day in the second half of the day. Toward the end of the NA session, the pair is trading at 0.6735, losing 0.15% on the day.

Hopes of the U.S. and China coming to a trade agreement ahead of March 1 deadline helped the kiwi stay relatively resilient against the buck especially when compared to major European currencies such as the euro and the GBP. Earlier today, White House senior adviser Kellyanne Conway told Fox News that President Trump could meet Chinese President Xi “very soon” and added that sides were getting closer to a trade deal.

Nevertheless, the US Dollar Index’s impressive rally, which is now in its eighth day, didn’t allow the pair to move back into the positive territory. At the moment, the DXY is up 0.43% on the day at 97.06, looking to post its highest daily close of 2019.

Later his week, the RBNZ is scheduled to announce its interest rate decision and release the monetary policy statement. Previewing the event, “We expect the Bank to reiterate a steady approach. If the RBNZ were to deviate it would be to the dovish side. We wouldn’t be surprised if the previously implied tightening was delayed for up to six months with a nod to the increase in international risks,” the NAB Research team noted in a recently published report.

Key technical levels