- Following Tuesday’s decline NZD/USD is staging a technical correction today
- DXY edges higher near 93.60.
- Risk on trading supported risk-sensitive kiwi
- The NZD/USD sold off across Monday and Tuesday, dropping to 0.6610. As market sentiment improved on Wednesday, NZD/USD rebounded, rallying 0.3% to 0.6640.
Risk appetite rises
New Zealand’s ANZ Business Confidence Index advanced from -41.8 in August to -26 this month whilst ANZ Activity Outlook Index rose to -8.9% from -17.5%.
Following deep losses on Tuesday global equity markets are rebounding on Wednesday, indicating a risk on mood which is supportive of the kiwi. The S&P 500 futures trade + 0.7% on the day. Risk sentiment is likely to drive markets in the US session.
Meanwhile the US Dollar is finding support from the selloff in major European currencies, particularly the Pound. At the time of writing DXY +0.12% at 93.63, potentially limiting NZD/USD’s upside for now.
JOLTS Job Openings feature on an otherwise quiet US economic docket. No significant market reaction is expected.