- NZD/USD continues to trade lower, fears to drop below 0.7000.
- US dollar index rebounds following Monday’s drop.
- Investors await US CPI data for fresh impulse.
The NZD/USD pair resumes Monday’s decline after opening higher near to the 0.7040 region. The pair staged a pullback and was last seen posting a 0.23% loss on the day, at 0.7010.
The move is sponsored by the rebound in the US dollar index (DXY) ahead of data release in the US. The DXY trades higher at 92.21, with gains of 0.08%.
China recorded a smaller trade surplus than estimated, as per the data release. The trade surplus narrowed to $13.8billion in March from a $19.80billion Y-o-Y basis and far below the market expectations at $52.05. Although exports growth remains robust, imports rose unexpectedly to 38.1% from the 22.1% Y-o-Y basis in March.
Investors digest the data and remain unaffected largely. The rise in imports suggests higher domestic demand, which is a positive sign for the kiwi, being the largest trading partner. capping the downside for the pair.
As for now, the dynamics around the US dollar index continue to influence the pair’s performance. Apart from that, traders are keenly watching over US Core Inflation data later in the day. Expectations of higher inflation linger on due to the recent upsurge in government spending and improved labor market expectations, which could boost the demand for the US dollar.
NZD/USD technical levels to consider
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