NZD/USD consolidates Wednesday's losses, trades near 0.68
- US Dollar Index rises above 97.
- Trade headlines help kiwi show resilience against its rivals.
- Coming up: Fourth-quarter GDP growth figures from the U.S.
Following Wednesday heavy sell-off that was triggered by the RBNZ's dovish shift in its policy statement, the NZD/USD pair staged a technical correction on Thursday and retraced a small part of yesterday's drop. As of writing, the pair was up 0.18% on the day at 0.6808.
“Given the weaker global economic outlook and reduced momentum in domestic spending, the more likely direction of our next OCR move is down,” the RBNZ said to point to a possible rate cıt in November and weighed on the kiwi. Moreover, despite the falling US T-bond yields, the greenback took advantage of the selling pressure surrounding major European currencies yesterday and forced the pair to continue to push lower.
Ahead of the critical GDP data from the U.S., the US Dollar Index is at its highest level in more than two weeks above the 97 mark, making it tough for the pair to extend its rebound. Analysts' see the 4th quarter GDP growth to ease to 1.8% from 2% in the previous estimate.
Earlier in the day, the data from New Zealand showed that the Business Confidence and Activity Outlook indexes deteriorated in March. However, optimistic comments from Chinese officials on the U.S.-China trade talks offset the potential negative impact of the dismal data on the NZD.
Key technical levels