NZD/USD posts modest daily gains above 0.6420 a DXY pulls away from session highs

• NZD/USD staging a rebound following a drop to 0.6400.
• US Dollar Index retreats slightly after rising above 97.50.
• Consumer Confidence data from New Zealand will be released on Friday.

The NZD/USD pair lost nearly 100 pips on Wednesday and continued to edge lower during the Asian session on Thursday. After testing 0.6400, however, the pair staged a rebound during the early American session and was last seen trading at 0.6428, gaining 0.3% on the day. 

Earlier in the day, the data from New Zealand revealed that the trade deficit narrowed $1.33 billion on a yearly basis in May from $2.41 billion and helped the kiwi show resilience against the greenback.

In the second half of the day, the US Bureau of Economic Analysis’ third estimate showed that the US GDP contracted by 5% in the first quarter as expected. Elsewhere, Durable Goods Orders surged by 15.8% in May following April’s decline of 18.1% and weekly Initial Jobless Claims edged lower to 1.48 million from 1.54 million.

DXY pulls away from session peak

Although risk-off flows provided a boost to the USD after these data, the US Dollar Index (DXY) lost its traction in the last hour. After climbing to a daily high of 97.60, the DXY retreated to 97.40 area, where it was still up 0.2% on the day.

A modest recovery witnessed in Wall Street’s main indexes seems to be making it difficult for the safe-haven greenback to preserve its strength. At the moment the S&P 500 and the Nasdaq Composite are both unchanged on the day while the Dow Jones Industrial is up 0.07%.

In the early trading hours of the Asian session, the ANZ’s Roy Morgan Consumer Confidence Index data from New Zealand will be looked upon for fresh impetus.

Technical levels to watch for