NZD/USD looks to close with strong gains above 0.6600
- NZD/USD rose to fresh weekly high above 0.6600.
- US Dollar Index extended slide toward 93.00 on Tuesday.
- GDT Price Index in New Zealand declined by 1.7%.
The NZD/USD pair gained traction in the second half of the day and rose to its highest level in a week at 0.6610. As of writing, the pair was up 0.74% on a daily basis at 0.6605.
USD selloff lifts NZD/USD on Tuesday
Earlier in the day, the pair stayed relatively quiet as heightened concerns over rising coronavirus infections in New Zealand didn't allow kiwi to preserve its strength against the greenback. However, the sharp drop witnessed in the US Dollar Index (DXY) during the American session provided a boost to the pair.
Falling US Treasury bond yields hurt the USD on Tuesday and the DXY slumped to its lowest level in more than two years at 92.13. At the moment, the index is down 0.58% on the day at 92.28.
US House Speaker Nancy Pelosi said on Tuesday that House Democrats were willing to cut their demands in the coronavirus relief bill by half to reach an agreement. Nevertheless, this comment doesn't seem to be having a significant impact on market sentiment with the 10-year US Treasury bond yield losing more than 3% on the day.
In the meantime, the bi-weekly Global Dairy Trade auction in New Zealand yielded a 1.7% decline in the GDT Price Index but was largely ignored by the market participants.
Technical levels to watch for