NZD/USD recovers modestly from daily lows, stays below 0.64

• Subdued market action allows NZD/USD to stay in its range.  
• Trump lowers tensions with China, voices willingness to make a deal.
• US Dollar Index moves sideways below 98 ahead of mid-tier data.

After touching its lowest level in nearly four years at 0.6361 yesterday, the NZD/USD pair rose to 0.64 region but struggled to extend its recovery today. As of writing, the pair was down 0.25% on the day at 0.6375.

With both sides taking a step back in the US-China trade conflict and calling for “calm” negotiations, the trade-sensitive NZD staged a modest rebound on Monday. Speaking at the G7 summit, President Trump said that he was confident that China was sincere about wanting to make a trade deal.

USD steadies after Monday’s rebound

However, the fact that easing tensions also allowed the Greenback to gather strength on the back of rising T-bond yields capped the pair’s upside. The US Dollar Index, which tracks the greenback’s value against a basket of six major currencies, closed the day with strong gains on Monday and is now staying in a consolidation phase below the 98 mark while waiting for the mid-tier macroeconomic data releases, which include the Conference Board Consumer Confidence Index, the Richmond Fed Manufacturing Index, and  the Federal Housing Finance Agency’s (FHFA)  Housing Price Index, from the US.

On the other hand, the data from New Zealand on Monday showed that the trade surplus in July widened to $5.46 billion from $4.98 billion in June on a yearly basis. The next significant data from New Zealand, the ANZ Activity Outlook and Business Confidence, will be released on Thursday.

Technical levels to watch for