NZD/USD rebounds above 0.7200 ahead of mid-tier US data
- NZD/USD is posting modest gains following Wednesday's decline.
- US Dollar Index fails to hold above 91.00 on Thursday.
- Housing Starts and Initial Jobless Claims data will be featured in US economic docket.
The NZD/USD pair dropped to its lowest level in more than 10 days at 0.7157 on Wednesday but started to erase its losses on Thursday. As of writing, the pair was trading at 0.7208, where it was up 0.27% on a daily basis.
DXY rally loses steam ahead of US data
In the absence of significant macroeconomic data releases from New Zealand, the USD's market valuation continues to impact NZD/USD's movements.
On Wednesday, the US Dollar Index (DXY) rose above 91.00 after the data published by the US Census Bureau showed that Retail Sales in January rose by 5.3% to beat the market expectation of 1% by a wide margin. Later in the day, the FOMC's January meeting minutes didn't reveal any surprising information regarding the policy outlook and the DXY closed the day in the positive territory.
On Thursday, the DXY seems to be having a difficult time preserving its momentum. However, if the weekly Initial Jobless Claims and January Housing Starts come in stronger than expected, the USD could regather its strength in the second half of the day. Additionally, the S&P 500 Futures are down 0.3% on the day, suggesting that safe-haven flows could also provide a boost to the USD during the American session.
On Friday, Producer Price Index (PPI) data from New Zealand will be looked upon for fresh impetus.
Technical levels to watch for