- Coronavirus fears, once again, weighs on NZD on Tuesday.
- US Dollar Index continues to push higher, renews multi-month tops.
- Coming up: NY Fed’s Empire State Manufacturing Survey.
The NZD/USD pair lost its traction on Tuesday and erased last week’s gains pressured by resurfacing coronavirus fears and the AUD/USD pair’s slide. As of writing, the pair was trading at fresh weekly lows at 0.6397, down 0.58% on the day.
China-proxy NZD weakens
After the Reserve Bank of Australia’s (RBA) meeting minutes showed that the bank is committed to keeping the policy rate low for an extended period, the AUD/USD pair came under pressure during the Asian session and weighed on the positively-correlated NZD/USD pair.
In the meantime, Apple’s announcement about the company possibly missing revenue and sales targets due to production issues and store closures in China reminded investors of the coronavirus outbreak’s negative impact on the global economy. Major Asian equity indexes finished the day sharply lower to reflect the sour market mood, which also hurts the demand for risk-sensitive antipodeans.
In the second half of the day, the Federal Reserve Bank of New York’s Empire State Manufacturing Survey will be the only significant data featured in the US economic docket.
After closing the previous day virtually unchanged, the US Dollar Index (DXY) is capitalizing on risk-off flows on Tuesday and forces the pair to continue to push lower. At the moment, the DXY is at its highest level since early October near 99.20.
Technical levels to watch for