- The NZD / USD reversed its direction after falling in the Asian session.
- The US dollar index registers a modest rebound after a three-day decline.
- Investors await PMI data from US Markit and ISM Services.
The risk-off market environment allowed the dollar to find demand during Asian business hours on Tuesday and caused the pair to NZD / USD fell to a new daily low of 0.6928. However, during the European session, the positive change observed in market sentiment helped the pair to erase its losses. At time of writing, the pair was up 0.07% on the day at 0.6968.
With an eye to US data, RBNZ policy announcements
Reflecting the improving market mood, major European stock indices were up 0.35% to 0.7% on the day, while US equity futures were up around 0.4%.
Meanwhile, the US dollar index, which closed the previous three trading days in negative territory, turned away from the daily high that it touched at 94.04 and was last seen clinging to modest gains at 93.94.
Later in the session, IHS Markit and ISM will release the September PMI reports. Investors expect economic activity in the services sector to show an ongoing expansion, but market participants will closely monitor inflation and employment components.
On Wednesday, the Reserve Bank of New Zealand will announce its monetary policy decisions. In anticipation of this event, “We believe that the New Zealand economy no longer requires the extreme monetary stimulus that an OCR of 0.25% provides, and that the current lockdown should not leave a noticeable scar on the economic front,” said Lee Sue. Ann, an economist at UOB. “Unless the country enters a prolonged lockdown, it is very likely that there will be an increase in October.”
Technical levels
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