NZD / USD retreats towards the 0.7000 zone, on course to close the fourth consecutive day lower

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  • The NZD / USD fell to fresh three-week lows on Tuesday.
  • The US dollar index stabilizes around 93.20, it seems to close sideways.
  • The major Wall Street indices are clinging to small daily gains.

After closing the previous three trading days in negative territory, the pair NZD / USD It rose to a daily high of 0.7057 at the start of the European session, but reversed its direction in the second half of the day. At time of writing, the pair, which touched a three-week low of 0.6694 during US trading hours, was down 0.3% on the day at 0.7003.

DXY recovers as investors turn cautious

In the absence of high-level macroeconomic data releases, risk perception remained the main driver of the NZD / USD movements on Tuesday. Earlier in the day, market optimism, reflected by strong gains in major European stock indices, made it difficult for the USD to find demand.

Although the major Wall Street indices opened decisively higher, they struggled to gain bullish momentum and the USD began to regain its strength, forcing the NZD / USD to turn south. At the moment, the S&P 500 index remains unchanged on the day at 4.358 and the US Dollar index remains lateralized at 93.22.

Meanwhile, New Zealand data revealed that the GDT price index increased by 1% after the last auction. However, this reading did not provoke a noticeable reaction in the market.

On Wednesday, the People’s Bank of China (PBoC) will publish the decision on preferential rates for 1- and 5-year loans. Investors expect the bank to keep those rates unchanged at 3.85% and 4.65%, respectively. However, a surprise rate cut due to the Evergrande crisis could provide a boost to the NZD during Asian business hours.

Technical levels

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