- The NZD / USD remains on the defensive at the beginning of the week.
- The US Dollar Index remains in positive territory above 92.30.
- The major Wall Street indices are still on track to open flat.
After last week’s rally, the pair NZD / USD made a technical correction and closed in negative territory on Monday. After spending hours of Asian trading moving sideways in a relatively tight range on Tuesday, the pair extended its slide and was last seen shedding 0.33% on the day at 0.7114.
USD continues to gain strength
Earlier in the day, a strong rally seen in the AUD / USD pair in the Reserve Bank of Australia’s monetary policy announcements helped the NZD / USD climb higher. However, the AUD / USD quickly reversed its direction and is currently losing 0.6% on the day, making it difficult for the positively correlated NZD / USD to recoup its losses.
On the other hand, the US dollar index, which fell to a monthly low following Friday’s dismal August jobs report, is rising for the second day in a row on Tuesday, rising 0.12% to 92.32.
In the absence of high-level macroeconomic data releases, the market’s cautious attitude appears to be helping the USD find demand. For the moment, the major European stock indices are down between 0.25% and 0.35%, while US equity futures are trading unchanged on the day.
During US business hours, New Zealand’s GDT auction will be considered for fresh momentum. The only noteworthy event on the US economic agenda will be the 3-year Treasury bond auction that will take place at 17:00 GMT.