NZD/USD clings to small gains above 0.5850 as focus shifts to Powell's speech
- US Dollar Index extends slide, drops to weekly lows below 110.50.
- Risk rally fades with global equity indexes posting losses on Thursday.
- FOMC Chairman Powell will make a rare TV appearance at 11:05 GMT.
The NZD/USD pair failed to hold above the 0.5900 handle on Wednesday and closed the day with modest gains near 0.5850. Although the USD continues to weaken against its rivals on Thursday, the souring market sentiment makes it difficult for the pair to extends its rally. As of writing, the pair was up 0.18% on the day at 0.5859.
With the two-day relief rally witnessed in global equity indexes fading on Thursday, the risk-sensitive NZD struggled to find demand. At the moment, major European stock indexes are erasing more than 2% as investors shift their attention to headlines surrounding the coronavirus outbreak.
USD remains on the back foot ahead of key data, Powell speech
On the other hand, the Federal Reserve's unlimited QE and the US Senate's approval of the historic $2 trillion stimulus package weigh on the USD to help the pair stay in the positive territory.
The US Dollar Index, which erased nearly 1.5% since the start of the week, is now at its lowest level in a week at 100.27, down 0.65% on the day.
At 11:05 GMT, FOMC Chairman Jerome Powell will be responding to questions on NBC. Later in the day, weekly Initial Jobless Claims, Q4 Gross Domestic Product and Trade Balance data from the US will be looked upon for fresh impetus.
Technical levels to watch for