- The NZD / USD is trading lower after posting modest gains on Thursday.
- The US Dollar Index climbs into positive territory above 90.00.
- The focus shifts to the US MU consumer confidence index data.
After managing to close in green on Thursday, the pair NZD / USD It was unable to preserve its bullish momentum and started to decline before the US session. At time of writing, the pair was down 0.22% on the day at 0.7180.
DXY gains traction in the recovery of bond yields
On Thursday, the sharp drop in US Treasury yields prevented the dollar from capitalizing on higher-than-expected Consumer Price Index (CPI) data for May. The US Dollar Index (DXY) closed in negative territory and helped the NZD / USD hold on to its daily gains.
However, with the 10-year benchmark US Treasury yield gaining nearly 1% on Friday, the DXY is up 0.2% to 90.23.
Hours earlier, New Zealand data showed Business NZ’s PMI modestly improved to 58.6 in May from 58.4 in April. This reading was better than the analyst estimate of 54.4, but was largely ignored by market participants.
The only data included in the US economic calendar will be the latest consumer sentiment index from the University of Michigan for June. In the meantime, investors will closely monitor the performance of US stocks. The S&P 500 remains on track to record a new all-time high after the opening bell with futures climbing 0.2%. Should risk flows dominate the markets before the weekend, the USD could struggle to regain more strength.