- NZD/USD remains on track post losses for the second straight day.
- US Dollar Index stays quiet below 90.00 in American session.
- Fed’s Beige Book showed price pressures continued to increase.
The NZD/USD pair dropped to a daily low of 0.7209 during the European trading hours but managed to stage a rebound in the second half of the day. After rebounding to 0.7250, however, the pair lost its momentum and was last seen losing 0.28% on a daily basis at 0.7235.
DXY looks to close flat below 90.00
Earlier in the day, the broad-based USD strength weighed on NZD/USD. The US Dollar Index (DXY) reached a daily high of 90.25 but reversed its direction in the American session and allowed the pair to pull away from lows. In the absence of significant fundamental drivers, falling US Treasury bond yields made it difficult for the USD to preserve its strength. At the moment, the benchmark 10-year US T-bond yield is losing 1.05% and the DXY is little changed at 89.92.
The inflation commentary in the Federal Reserve’s Beige Book failed to provide a boost to US T-bond yields. The report revealed that overall price pressures continued to increase in the Fed’s 12 districts since the last report. “Looking forward, contacts anticipate facing cost increases and charging higher prices in coming months,” the publication further read.
Meanwhile, the negative shift witnessed in market sentiment is limiting NZD/USD’s upside. The S&P 500 Index, which opened in the positive territory, is currently posting small losses at 4,200.
The ANZ Commodity Price Index will be the only data release from New Zealand on Thursday. Nevertheless, market participants are likely to ignore this data.