- The NZDUSD receives new offers on Friday amid the appearance of some dollar selling.
- A modest decline in US bond yields and a positive risk tone weigh on the dollar.
- The pair continues to record strong gains for the fifth week in a row.
The NZDUSD pair regains positive traction on Friday and builds on the previous day’s late recovery from the 0.6065 region, or the weekly low. The pair rises to the 0.6175-0.6180 zone during the first half of the European session and remains within range of its highest level since August 26 hit on Tuesday.
The US dollar struggles to gain significant traction on the last day of the week and turns out to be a key factor acting as a tailwind for the NZDUSD pair. A softer tone around US Treasury Yields keeps dollar bulls on the defensive. Apart from this, a modest recovery in equity markets further undermines the safe-haven dollar and benefits the risk sentiment Kiwi.
That said, growing concerns about economic headwinds from a new COVID-19 outbreak in China and lingering geopolitical risks could dampen any optimism in the markets. Furthermore, investors seem convinced that the Fed will continue to raise interest rates, albeit at a slower pace, to curb inflation. This should act as a tailwind for the dollar and limit the NZDUSD pair.
Going forward, traders await the release of US Existing Home Sales, which will be released later during the early American session. This, along with US bond yields and broader risk sentiment, will weigh on the dollar and provide some momentum. However, the NZDUSD remains on track to finish in positive territory for the fifth week in a row.
Technical levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
