- US Dollar Index sticks to modest daily gains above 97.10.
- US ADP Employment Change is expected to come in at +160K in December.
- Markets wait for US President Trump to deliver a statement on conflict with Iran.
The NZD/USD pair reversed its direction after rebounding to 0.6670 during the Asian session and erased almost all of its daily gains. As of writing, the pair was down 0.09% on the day at 0.6645.
USD reacts to fluctuations in Treasury bond yields
Reports of Iran launching missile attacks on the US military bases in Iraq caused the US Treasury bond yields to fall sharply earlier in the day and weighed on the greenback to help the pair push higher. With the concerns over further escalation of the conflict easing amid news suggesting that there were no casualties, the USD started to gather strength on the back of recovering T-bond yields.
As of writing, the US Dollar Index was up 0.18% on a daily basis at 97.15. In the early trading hours of the American session, the ADP will release its private-sector employment report, which is expected to show an increase of 160,000 in December. A higher-than-expected reading could help the USD continue to gather strength and drag the pair lower in the second half of the day.
In the meantime, markets will be paying close attention to US President Trump’s statement on the latest developments.
The only macroeconomic data release from New Zealand on Wednesday will be the ANZ Commodity Price Index.
Technical levels to watch for