- The NZD / USD fails to benefit from the broad decline in the US dollar.
- Trade tensions between New Zealand and China and a rebound in US Treasury yields weigh on the pair.
- The focus remains on the US CPI data and Powell’s speech.
The corrective pullback in the pair NZD / USD accelerated during the European session on Wednesday, with the bears aiming to test the round 0.7200 level. At time of writing, the pair remains negative on the day around the 0.7210 region.
The NZD / USD Extends its pullback from the one-month highs of 0.7254, after having failed to find acceptance above this level on several occasions.
The latest downward movement in the pair could be mainly attributed to a rapid rally seen in the US dollar against its main rivals, as general market sentiment turns somewhat tepid.
The key catalyst behind the NZD / USD weakness is the latest dispute between New Zealand and China over the suspension of imports of seafood by Beijing. In response, the New Zealand authorities have asked their Chinese counterpart for urgent clarification on the matter.
Further, a rebound in US Treasury yields It also seems to weigh on the NZD’s appeal as a higher-yielding alternative asset. Furthermore, the negative Chinese CPI figures for January have offered no respite to the NZD bulls.
The focus is now on the release of the US CPI and on Fed Chairman Jerome Powell’s speech.
NZD / USD technical levels
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