NZD/USD registers modest daily losses, continues to hold above 0.6000
- US Dollar Index rebounds to 99 area on Monday.
- RBNZ reiterates that it's committed to keeping borrowing costs low.
- Coming up: Dallas Fed Manufacturing Index from US.
The NZD/USD pair took advantage of the broad-based USD weakness last week and gained more than 300 pips but struggled to extend its rally on Monday. As of writing, the pair was trading at 0.6018, losing 0.27% on a daily basis.
DXY rebounds on Monday
The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, erased 3.57% last week as the Federal Reserve's drastic actions helped ease concerns over USD shortages in funding markets. Moreover, the decisive recovery witnessed in global equity indexes made it difficult for the USD to find demand as a safe-haven.
However, with investors shifting their focus to the surging number of confirmed coronavirus cases and the potential negative impact of worldwide lockdowns on the global economy, the market sentiment seems to have soured at the start of the new week.
Reflecting the dismal mood, the DXY is up 0.6% on the day at 98.90. Later in the day, the Federal Reserve Bank of Dallas' Manufacturing Index will be looked upon for fresh impetus.
On Tuesday, the ANZ Business Confidence and Activity outlook indexes will be featured in the Asian economic docket.
Technical levels to watch for