NZD/USD renews multi-week lows, closes in on 0.7100
- NZD/USD is losing more than 1% on Tuesday.
- Broad-based USD strength is weighing heavily on NZD/USD.
- Focus shifts labour market report from New Zealand.
The NZD/USD pair registered modest daily gains on Monday and closed a little below 0.7200. With the greenback regathering its strength on Tuesday, the pair made a sharp U-turn and was last seen losing trading at its lowest level in nearly three weeks at 0.7117, losing 1.1% on the day.
Focus shifts to New Zealand jobs report
The risk-averse market environment is providing a boost to the safe-haven USD. The US Dollar Index (DXY) is currently up 0.33% on the day at 91.27 and the S&P 500 Futures are losing 0.6%. In the meantime, the 10-year US Treasury bond yield is staying flat around 1.6%, limiting the DXY's upside for the time being.
Later in the session, the ISM-NY Business Conditions Index, the IBD/TIPP Economic Optimism Index and March Factory Orders data from the US will be watched closely by market participants. Nevertheless, if the market mood remains sour in the second half of the day, the USD is likely to continue to outperform its rivals.
On Wednesday, the New Zealand jobs report will be the next significant catalyst for the kiwi.
Previewing this data, "after a big surprise booked in the December quarter, a consolidation in New Zealand’s labour market recovery is unlikely to throw the markets off-guard," 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 pace of hiring is expected to slow amid a steady unemployment rate."
Technical levels to watch for