NZD / USD recovers initial losses and climbs back above 0.7200

• The NZD / USD has turned higher after falling during the Asian session.
• The US dollar DXY index records small daily gains above 90.40.
• Optimistic market sentiment is helping the NZD find demand on Tuesday.

The poor performance of the main stock indices during the Asian session has helped the US dollar to continue to strengthen against its rivals at the beginning of the day on Tuesday. However, after falling to a daily low of 0.7167, the NZD / USD has rebounded thanks to improved sentiment. At the time of writing, the pair is gaining 0.17% on the day at 0.7208.

The DXY index continues to react to changes in risk perception

Earlier in the day, data from New Zealand showed that the NZ service business performance index rose to 49.2 points in December from 46.7 in November, but this figure has not helped the NZD find demand.

Reflecting the positive market sentiment during the European session, Germany’s DAX 30 and Euro Stoxx 50 indices are up more than 1%. The US Dollar DXY Index, which has hit a fresh six-day high at 90.61, is currently holding on to small daily gains at 90.45.

Later in the day, data from the Confeerence Board Consumer Confidence Index and the House Price Index stand out on the US economic calendar.

Meanwhile, the major Wall Street indices appear to start the day in negative territory, with S&P 500 futures shedding 0.25%. Investors appear to have taken a cautious stance amid renewed concerns about a delay in passing the US $ 1.9 trillion stimulus bill. If US equities decline on Tuesday, the US dollar could strengthen as a safe haven and make it difficult for the NZD / USD to rise in the second half of the day.

NZD / USD technical levels