- NZD/USD extends gains from last week
- USD weakness pushes the pair higher.
Risk flows dominate NZD/USD has climbed across the previous three weeks and continued to push higher at the start of the week. Improved risk sentiment weighs on the greenback. NZD/USD rallied to its highest level since December 2018 at 0.6967.
DXY edges lower ahead of US PMI data
US Dollar Index (DXY) shed 0.4% last week amid positive covid-19 vaccine developments raising hopes of a steady economic recovery. Reflecting the risk on mood the S&P 500 Futures are up 0.5% and the USD could struggle to rebound. DXY is down 0.32% at 92.06.
New Zealand Retail Sales in the third quarter rose by 28% quarter on quarter. This followed a contraction of -14.8% in Q2 and beat forecasts of 20%, boosting the kiwi.
Looking ahead, November Services and Manufacturing PMI data for the US will be in focus. A strong reading could weaken the US Dollar further. There is no significant data releases from New Zealand on Tuesday. Risk could remain the primary driver of NZD/USD.
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