NZD/USD consolidates below 0.7250 amid USD weakness, risk-sensitivity

• NZD/USD trades subdued in the initial Asian trading hours.
• US T-bonds yield steady but fail to lift the demand for the US dollar.
• Kiwi gains are limited on risk sensitivity.

The NZD/USD pair moves cautiously on Tuesday morning in the Asian trading hours. The pair continues to trade in the vicinity of the previous day’s trading range with positive bias.

At the time of writing, NZD/USD trades at 0.7229, down 0.01% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against the basket of six major currencies, stood near the 90.00 level with 0.17% losses. The depreciative move in the USD is the primary reason for the upside movement in the pair. 

The latest US job data, which came at 559k in May below the market expectations at 650k, cemented the Fed’s narrative that the central bank will continue to remain ultra accommodative until the economy has further recovered from the pandemic. The major concern remains employment and growth for the central bank, pricing pressure is a secondary priority for the time being.

Meanwhile, US Secretary Jenet Yellen’s hawkish comments on interest rates also failed to boost the demand for the US dollar.

On the other hand, Kiwi gains were limited on the market risk sensitivity. The Reserve Bank of New Zealand in its May policy announced probable rate hikes as early as  2022. The RBNZ also published its projection for the Official Cash Rate (OCR) that showed the rise of OCR would likely be in the second half of 2022.

Against this backdrop, S&P 500 Futures were trading at 4,226, up 0.03%. 

As for now, traders turn their attention to the release of US Goods and Services Trade Balance data for fresh trading impetus.

NZD/USD additional levels