- NZD / USD remains under modest downward pressure following Wednesday’s rally.
- The US Dollar DXY Index bounces above 91.60 ahead of the initial jobless claims data.
- Rising US Treasury yields continue to support the dollar.
The strong selling pressure surrounding the US dollar at the end of the American session allowed the NZD / USD close with strong gains on Wednesday. Nevertheless, the pair has failed to retain its bullish momentum and has started to retreat on its rise. At the time of writing, the NZD / USD is down 0.19% on the day at 0.7230.
DXY Index Recovers After Inspired Drop After FOMC
The summary of projections from the US Federal Reserve revealed on Wednesday that most monetary policy makers did not expect a rate hike until the end of 2023. Additionally, FOMC Chairman Jerome Powell reaffirmed that they won’t even think about reducing asset purchases until they see substantial progress toward their employment and inflation targets.
The pessimistic tone of the FOMC triggered a sell-off of the USD and the US dollar DXY index snapped a three-day winning streak, shedding nearly 0.5% on Wednesday.
Nevertheless, the 10-year US Treasury yield extended its rally to its highest level in nearly 14 months at 1.744% Thursday, helping the dollar to regain its strength. At the moment, the DXY index is up 0.2% on the day at 91.62.
During the American session, the initial weekly unemployment claims from the US Department of Labor will be the only data included in the US economic calendar.
Meanwhile, S&P 500 futures are down 0.4% on the day, suggesting that the USD is likely to continue to outperform other currencies in the second half of the day, with investors becoming cautious amid rising returns. of Treasury bonds.
NZD / USD technical levels
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