NZD/USD fails to hold above 0.7200 as DXY continues to push higher
- NZD/USD is falling for the second straight day.
- US Dollar Index edges higher toward 91.00 on Wednesday.
- Investors await mid-tier US data and FOMC Minutes.
The renewed USD strength in the second half of the day weighed on the NZD/USD pair on Tuesday and forced it to close in the negative territory. With the US Dollar Index (DXY) preserving its bullish momentum during the European trading hours, NZD/USD remains depressed and was last seen losing 0.3% on the day at 0.7191.
DXY keeps a firm footing
Supported by a sharp upsurge witnessed in the US Treasury bond yields, the DXY posted modest daily gains on Tuesday and is currently at its highest level in eight days at 90.82, rising 0.35% on a daily basis. Although the US T-bond yields seem to be struggling to push higher, the risk-averse market environment helps the USD find demand on Wednesday.
Later in the day, Retail Sales, Industrial Production and Producer Price Index (PPI) data will be featured in the US economic docket. More importantly, the FOMC will publish the minutes of its February meeting.
FOMC policymakers made it clear that the Fed will not even think about tapering asset purchases and will not overreact to short-term spikes in inflation. Investors don't expect the statement to deliver any fresh clues regarding the policy outlook.
Meanwhile, the S&P 500 Futures are down 0.1% and a selloff in US stocks is likely to allow the greenback to continue to outperform its rivals in the American session.
There won't be any macroeconomic data releases from New Zealand on Thursday.
Technical levels to watch for