NZD/USD plummets below 0.6900 as DXY reaches a fresh yearly high
- NZD/USD underpinned by broad US Dollar strength across the board.
- The US Dollar Index reaches new yearly highs, despite upbeat market sentiment.
- US Pending Home Sales rose by 8.1% in August.
The NZD/USD is slumping to new monthly lows trading at 0.6868, losing 1.31% at the time of writing in the day. The pair gained follow-through selling for the second day in a row, extending Tuesday’s losses beneath the 0.6900 psychological level. Demand for US dollars is weighing on the New Zealand dollar.
The US Dollar Index is reaching new yearly highs around 94.30, up some 0.62%, despite falling US bond yields, with the 10-year benchmark note rate down two basis points (bps) currently at 1.517%.
The market sentiment is upbeat after two straight days of losses. European stock indices are climbing between 0.57% and 1.24%, while in the US, the Dow, the S&P 500, and the Nasdaq trim losses, advancing 0.45%, 0.42%, and 0.23%, respectively. Despite the risk-on environment, the US Dollar is in the driver’s seat.
US Pending Home Sales rebound in August
On Wednesday, in the US, the National Association of Realtors released the Pending Home Sales for August. The figure came better than expected, increasing 8.1%, more than the 1.4% foreseen on a monthly basis. However, compared to the year-over-year figure, sales shrank by 8.3%, against an increase of 14.5% for the same period.
Putting this aside, on Thursday, Statistics of New Zealand will release the Building Permits for August on a monthly basis, expected at 2.3%, versus July’s reading of 2.1%. Also, the ANZ Business Confidence and the ANZ Activity Outlook for September.
Meanwhile, in the US, Initial Jobless Claims are expected to drop to 335K. Further, the Gross Domestic Product for the second quarter on a yearly basis is predicted at 6.6%, in line with the previous period. Additionally, the Core Personal Consumption Expenditures (Q2) is foreseen at 6.1%.
That said, readings of Macroeconomic data coupled with market sentiment could offer direction for the NZD/USD pair.
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