NZD/USD climbs to mid-0.65s on improved sentiment, weaker dollar
- NZD/USD stages decisive recovery on Friday.
- Monthly trade surplus of NZ beats expectations in April.
- US Dollar Index drops to weekly lows below 98.
After dropping to its lowest level since late October at 0.6482 on Thursday, the NZD/USD pair reversed its direction to close the day modestly higher and continued to push higher on Friday boosted by slightly improved market sentiment. As of writing, the pair was up 0.42% on a daily basis at 0.6545.
Despite the lack of fresh developments that could deescalate the U.S.-China trade war fears, the risk appetite seems to be dominating the market action on Friday with the 10-year US T-bond yield adding more than 1.5% on a daily basis. Moreover, the S&P 500 Futures is adding 0.65% to suggest that Wall Street will open in the positive territory.
Meanwhile, the data published by Statistics New Zealand earlier today revealed that the trade surplus in April was $433 million, much higher than the market expectation of $4 million to provide an additional lift to the kiwi.
On the other hand, the broad-based USD weakness on Friday allows the pair to preserve its bullish momentum. Ahead of the durable goods orders data from the U.S., the US Dollar Index is down 0.13% on the day at 97.73. However, this recent drop seems to be a technical correction of this week's rally that carried the pair to its highest level in two years. If investors don't feel the need to flee to safer assets in the remainder of the day, the pair is likely to cling to its gains.
Technical levels to consider