- The NZD / USD lost its traction after climbing to 0.7230.
- The US Dollar Index rebounded above 89.50 before US data.
- The major Wall Street indices appear to be opening in positive territory.
The pair NZD / USD it rose during the first half of the day and approached the multi-year high it set at 0.7242 last week. However, the pair lost its traction in the last hour and erased a portion of its daily gains. At time of writing, the NZD / USD was up modestly on the day at 0.7205.
The USD starts 2021 with a weak tone
The risk market environment on the first trading day of 2021 helped the risk-sensitive NZD gain traction against its rivals. Meanwhile, data from China showed that business activity in the manufacturing sector continued to expand in December, providing an additional boost to the kiwi.
On the other hand, the USD struggled to find the demand as a safe haven earlier in the week. The US Dollar Index (DXY) tumbled to a new multi-year low of 89.42 earlier in the day, but made a technical correction ahead of the manufacturing PMI data. At the moment, the DXY is losing 0.42% to 89.55.
However, the lack of fundamental drivers behind the DXY rally suggests that bearish pressure is likely to remain intact with the major Wall Street indices starting the day in positive territory. S&P 500 futures are currently up 0.4%.
Meanwhile, Atlanta Fed Chairman Raphael Bostic and Chicago Federal Reserve Bank Chairman Charles Evans are scheduled to deliver speeches at 15:00 GMT.
Technical levels
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