- The NZD / USD is up for the fourth day in a row on Thursday.
- Widespread weakness in the USD helps the NZD / USD maintain its bullish momentum.
- The focus is on key macroeconomic data released in the United States.
NZD / USD posted small daily gains on Thursday and extended their lead to a new monthly high of 0.6694. At the time of writing, the pair was up 0.77% on a daily basis to 0.6688.
DXY drops below 93.00 Friday
Widespread selling pressure around the greenback seems to give NZD / USD a boost on Friday. After FOMC Chairman Jerome Powell announced that the Fed would target medium inflation as a new strategy, the US Dollar Index (DXY) has fluctuated within a wide range, suggesting that investors have struggled to balance decide on what this means for the USD.
However, the DXY turned south and fell to a 10-day low of 92.28 on Friday and was last seen losing 0.67% on the day to 92.37. Commenting on the potential impact of the Fed’s new dollar strategy, “this poses a cyclical challenge for the dollar and gives more credibility to reducing the dollar’s long-standing overvaluation,” the TD Securities analysts. “Tactically, the USD shorts run deep, but that doesn’t mean they need to suffer a reversal.”
Later today, the personal expenditure, personal income and personal consumption expenditure (PCE) price index data from the United States will be examined for further impetus. However, these readings are unlikely to trigger a significant market reaction and the US dollar looks set to end the week on its feet.