- NZD/USD gained traction on Friday and erased Thursday’s losses.
- US Dollar Index is registering small losses in quiet day.
- Consumer Price Index (CPI) data will be featured in US economic docket.
Supported by the relative upbeat market mood, the NZD/USD pair is trading on a firm footing on Friday. As of writing, the pair was up 0.55% on a daily basis at 0.6685.
USD struggles to find demand as mood turns positive
On Thursday, the greenback came under broad selling pressure after the European Central Bank (ECB) refrained from voicing concerns over the euro’s appreciation. The US Dollar Index (DXY) fell sharply to 92.70 initially but staged a decisive rebound in the late American session as the heavy selloff witnessed in US stocks ramped up the demand for the safe-haven USD.
On Friday, S&P 500 futures are posting strong gains, suggesting that risk flows could dominate the markets in the second half of the day and help the pair push higher.
Meanwhile, the only data featured in the US economic docket will be the August Consumer Price Index (CPI). Markets expect the CPI to rise to 1.2% on a yearly basis from 1%. Ahead of this data, the DXY is down 0.17% on the day at 93.20.
Earlier in the day, the data from New Zealand showed that the Business NZ PMI slumped to 50.7 in August from 58.8 in July. This reading missed the market expectation of 66.8 by a wide margin but had little to no impact on the NZD’s performance against its rivals.
Technical levels to watch for
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