NZD/USD trades near multi-week highs it set above 0.7100
- NZD/USD clings to impressive daily gains on Tuesday.
- Upbeat data from New Zealand provided a boost to NZD.
- US Dollar Index stays in the green above 92.30 ahead of PMI data.
The NZD/USD pair gained traction during the Asian trading hours on Tuesday and reached its highest level since mid-June at 0.7106. With the market action turning subdued ahead of the key data releases from the US, the pair is consolidating its gains and was last seen trading at 0.7087, where it was still up nearly 0.9% on a daily basis.
NZD capitalizes on strong data, AUD rally
Earlier in the day, the data from New Zealand showed that the NZIER Business Confidence Index improved sharply to 7% in the second quarter from -13% in the first quarter and this upbeat reading provided a boost to the NZD.
Additionally, the sharp upsurge witnessed in the positively-correlated AUD/USD pair following the Reserve Bank of Australia's (RBA) hawkish policy shift supported NZD/USD's rally. The RBA announced on Tuesday that it reduced the weekly asset purchases to A$4 billion from A$5 billion.
Later in the session, the IHS Markit's and the ISM's Services PMI data from the US will be looked upon for fresh impetus. Market participants will pay close attention to the Prices Paid component of the ISM PMI report. When the same component of the ISM Manufacturing PMI printed a series high in June, the USD outperformed its rivals and a similar reaction could be expected. Ahead of these data, the US Dollar Index is posting small daily gains at 92.33.
Furthermore, the GDT Price Index from New Zealand will be released during the American session.
Technical levels to watch for