NZD / USD falls below 0.7250 amid renewed USD strength

• The NZD / USD turned south after climbing to multi-year highs on Wednesday.
• The decisive rally seen in the US dollar index weighs on the NZD / USD.
• The focus shifts to the release of key US macroeconomic data.

After touching its highest level since April 2018 at 0.7316 on Wednesday, the pair NZD / USD It reversed its course on Thursday under pressure from the general strength of the USD. At time of writing, the pair was down 0.58% on the day at 0.7247.

DXY is approaching 90.00

The sharp rally seen in US Treasury yields helped the dollar find demand despite the risky positive market environment on Wednesday. The yield on 10-year US Treasuries gained more than 8% as investors continued to value rising government spending and Democrats took a majority in both the House and Senate.

The US dollar index (DXY), which fell to its worst level in more than two years at 89.20 on Wednesday, made a decisive recovery and closed in positive territory. With US Treasury yields holding in positive territory, the DXY retains its bullish momentum and was last seen gaining 0.35% to 89.84.

Later in the day, the US Department of Labor will release weekly data for initial jobless claims. In addition, the ISM will publish the PMI report for services for December.

Meanwhile, the major Wall Street indices are still on track to open into positive territory with S&P 500 futures climbing nearly 0.4%. If the market mood remains bullish in the second half of the day, the USD could struggle to extend its bounce and the NZD / USD decline could remain limited.

No major macroeconomic data from New Zealand will be released on Friday.

Technical levels

NZD / USD