NZD / USD turns negative on the day near 0.7000 after initial rally

• The NZD / USD reversed its direction after rising sharply earlier in the day.
• The US dollar index remains above 92.50 in the American session.
• Market sentiment deteriorated with the major Wall Street indices pushing down.

The pair NZD / USD It reached its highest level since mid-June at 0.7106 on Tuesday, but wiped out all of its gains in the second half of the day. At time of writing, the pair was down 0.2% to 0.7010.

Earlier in the day, the strong rally seen in the AUD / USD pair and bullish data from New Zealand provided a boost to the NZD / USD. Data from New Zealand revealed that the NZIER Business Confidence Index improved sharply to 7% in the second quarter from -13% in the first quarter. In addition, the Reserve Bank of Australia (RBA) decided to reduce weekly asset purchases to A $ 4 billion from A $ 5 billion after its July meeting.

On a negative note, the biweekly GDT price index hit -3.6%, disappointing analysts’ estimate of -0.3%.

DXY rises above 92.50 on risk aversion

At the beginning of the US session, the Institute for Supply Management (ISM) reported that the services PMI fell to 60.1 in June from 64 in May, disappointing the market’s expectation of 63.5. The underlying details of the release showed that the price paid index fell to 79.5 from 80.6 and the employment index fell back to 49.3 from 55.3.

Although the initial market reaction to this report was largely subdued, the observed negative shift in market sentiment helped the USD outperform its rivals. With the major Wall Street indices suffering losses, the US Dollar Index jumped above 92.50 and was last seen rising 0.35% on the day. Meanwhile, the Dow Jones Industrial Average and S&P 500 indices were down 1.25% and 0.8% respectively.

Technical levels