- The NZD / USD erased a portion of its daily losses during the US session.
- The US dollar index is still on track to close the third day in a row lower.
- The major Wall Street indices are trading deeply in bearish numbers.
The pair NZD / USD started the new week on the left foot and fell to a daily low of 0.7182 before starting a recovery in the second half of the day. At time of writing, the pair was down 0.52% on the day at 0.7217.
DXY loses traction
Earlier in the day, disappointing data from China and the risk-averse market environment made it difficult for kiwi to find demand. Retail sales in China rose 17.7% in April, compared with analysts’ estimate of 24.9%, and major Asian stock indexes ended the day sharply lower.
During the US session, the dollar lost some interest and allowed NZD / USD to retrace a part of its daily decline. The US Dollar Index (DXY), which advanced to a daily high of 90.42, was last seen at 90.15, where it was down 0.17% on the day.
Meanwhile, the S&P 500 and Nasdaq Composite indices are down 0.4% and 1%, respectively, limiting the NZD / USD rise for the time being.
The only US data revealed on Monday that the New York Fed’s Empire State Manufacturing Index fell to 24.3 in May from 26.3 in April, but was largely ignored by market participants. No significant macroeconomic data from New Zealand will be released on Tuesday and risk perception is likely to continue to drive the pair’s action.
Technical levels
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