- NZD / USD supported by broad US dollar strength across the board.
- The US dollar index hits new yearly highs, despite optimistic market sentiment.
- Pending home sales in the United States rose 8.1% in August.
NZD / USD plunges to new monthly lows trading at 0.6868, shedding 1.31% at the time of writing. The pair won the follow-up sale for the second day in a row, extending Tuesday’s losses below the 0.6900 psychological level. Demand for US dollars is weighing on the New Zealand dollar.
The US dollar index is reaching new yearly highs around 94.30, up around 0.62%, despite falling US bond yields, with the 10-year yield currently down two basis points (bps) at 1,517%.
Market sentiment is bullish after two consecutive days of losses. The European stock indices rose between 0.57% and 1.24%, while in the United States, the Dow, the S&P 500 and the Nasdaq cut losses, advancing 0.45%, 0.42% and 0.23%, respectively. Despite the risk appetite, the US dollar is in the driver’s seat.
Pending US home sales rebound in August
In the United States on Wednesday, the National Association of Realtors released pending home sales for August. The figure was better than expected, with an increase of 8.1%, higher than the 1.4% expected monthly. However, compared to the year-on-year figure, sales were down 8.3%, compared to an increase of 14.5% in the same period.
That aside, on Thursday, Statistics of New Zealand will release building permits for August on a monthly basis, forecast at 2.3%, down from July’s reading of 2.1%. Also, ANZ business confidence and ANZ activity outlook for September.
Meanwhile, in the United States, unemployment claims are expected to drop to 335,000. In addition, the Gross Domestic Product for the second quarter is expected to be 6.6% annually, in line with the previous period. In addition, basic personal consumption expenses (second quarter) are forecast at 6.1%.
That said, the macroeconomic data readings coupled with market sentiment could offer direction for the NZD / USD pair.
TECHNICAL LEVELS
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