NZD / USD updates weekly lows, approaching 0.7100

• The NZD / USD is losing more than 1% on Tuesday.
• The broad-based USD strength is weighing heavily on the NZD / USD.
• The focus shifts the New Zealand labor market report.

The pair NZD / USD posted modest daily gains on Monday and closed slightly below 0.7200. With the dollar regaining strength on Tuesday, the pair took a 180 degree turn and was last seen losing trades at its lowest level in nearly three weeks at 0.7117, shedding 1.1% on the day.

Focus shifts to New Zealand jobs report

Risk aversion is providing a boost to the dollar as a safe haven. The US Dollar Index (DXY) is currently up 0.33% on the day at 91.27 and S&P 500 futures are losing 0.6%. Meanwhile, the 10-year US Treasury yield remains stable at around 1.6%, limiting the DXY rise for the time being.

Later in the session, market participants will closely follow the ISM-NY Trading Conditions Index, IBD / TIPP Economic Optimism Index, and March US Factory Orders. Market sentiment remains sour in the second half of the day, the USD is likely to continue to outperform its rivals.

On Wednesday, New Zealand’s employment report will be the next significant catalyst for kiwi.

With a preview of this data, “After a big surprise booked in the December quarter, a consolidation in the New Zealand labor market recovery is unlikely to take markets by surprise,” said FXStreet analyst Dhwani Mehta. “However, the focus will remain on the participation rate, which is the percentage of the population actively looking for work, as the hiring pace is expected to slow amid a steady unemployment rate.”

Technical levels