NZD/USD drops to fresh multi-month lows below 0.6300
- Greenback gathers strength on US T-bond yield recovery.
- Market sentiment remains mixed with European stocks suffering heavy losses.
- Coming up from NZ: Trade Balance and Business Confidence data.
After spending the first half of the day moving sideways in a tight range above 0.6300, the NZD/USD pair lost its traction and touched its lowest level since mid-October at 0.6295 in the last hour. As of writing, the pair was trading at 0.6301, down 0.28% on a daily basis.
The greenback, which suffered losses against its major rivals in the last few days amid the sharp drop witnessed in the US Treasury bond yields, seems to be gathering strength ahead of the American session. With the 10-year US Treasury bond yield adding 0.8% on the day, the US Dollar Index is up 0.1% at 99.10 to weigh on the pair.
Meanwhile, the sharp decline seen in major European equity indexes points to a mixed risk sentiment on Wednesday and make it difficult for the NZD to find demand.
The only macroeconomic data featured in the US economic docket will be New Home Sales and it's unlikely to trigger a significant market reaction. Meanwhile, market participants will continue to keep a close eye on headlines surrounding the coronavirus outbreak and the performance of the US T-bond yields.
During the Asian session on Thursday, Trade Balance and ANZ Business Confidence Index from New Zealand will be looked upon for fresh catalysts.
Technical levels to consider