NZD/USD continues to edge lower toward 0.7100 on modest USD recovery

  • NZD/USD is staying on the back foot at the start of the week.
  • US Dollar Index stays in the positive territory above 92.30.
  • Wall Street’s main indexes remain on track to open flat.

Following last week’s upsurge, the NZD/USD pair staged a technical correction and closed in the negative territory on Monday. After spending the Asian trading hours moving sideways in a relatively tight range on Tuesday, the pair extended its slide and was last seen losing 0.33% on a daily basis at 0.7114.

USD continues to gather strength

Earlier in the day, a sharp upsurge witnessed in the AUD/USD pair on the Reserve Bank of Australia’s monetary policy announcements helped NZD/USD edge higher. However, AUD/USD quickly reversed its direction and is currently losing 0.6% on the day, making it difficult for positively-correlated NZD/USD to recover its losses. 

Breaking: AUD/USD jumps as RBA keeps rates on-hold, maintains tapering plans.

On the other hand, the US Dollar Index, which slumped to a monthly low following the dismal August jobs report on Friday, is pushing higher for the second straight day on Tuesday and was last up 0.12% at 92.32.

In the absence of high-tier macroeconomic data releases, the cautious market mood seems to be helping the USD find demand. At the moment, major European equity indexes are down between 0.25% and 0.35% while the US stocks futures trade flat on the day.

During the American trading hours, the GDT auction from New Zealand will be looked upon for fresh impetus. The only noteworthy event in the US economic docket will be the 3-year Treasury note auction that will take place at 1700 GMT.

Technical levels to watch for

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