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  • NZD/USD lost its traction after climbing to fresh multi-year highs.
  • US Dollar Index recovers toward 90.00 after latest data. 
  • US economy expanded by 4.1% in Q4 as expected.

The NZD/USD pair advanced to its highest level since August 2017 at 0.7465 on Thursday but reversed its direction in the early American session. As of writing, the pair was posting small daily losses at 0.7430.

USD recovers on the back of rising T-bond yields

The broad-based USD weakness allowed NZD/USD to build on its weekly gains during the first half of the day. The US Dollar Index (DXY) slumped to its lowest level since early January at 89.69 during the European session as the greenback struggled to find demand as a safe-haven. 

However, the sharp upsurge witnessed in the US Treasury bond yield following the latest batch of US data helped the DXY stage a rebound.

In its second estimate, the US Bureau of Economic Analysis reported that the Real Gross Domestic Product (GDP) expanded at an annual rate of 4.1% in the fourth quarter. Additionally, the weekly Initial Jobless Claims fell to 730K and came in much better than the market expectation of 838K. Finally, Durable Doods Orders in January rose by 3.4% and beat analysts’ estimate for an increase of 1.1% by a wide margin. 

At the moment, the 10-year US Treasury bond yield is up 5.7% on the day at 1.463 and the DXY is losing 0.35% at 89.85.

In the early trading hours of the Asian session, Roy Morgan Consumer Confidence Index and Trade Balance data will be released from New Zealand.

Technical levels to watch for

 

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