NZD/USD drops below 0.6500 on risk-aversion
- NZD/USD pair turned south after posting modest losses on Wednesday.
- Risk-averse market environment weighs on the risk-sensitive NZD.
- US Dollar Index posts small daily gains above 96.00.
The NZD/USD pair took advantage of the broad-based selling pressure surrounding the greenback and closed modestly higher on Wednesday. However, with the market sentiment turning sour on Thursday, the pair lost its traction and was last seen losing 0.6% on the day at 0.6498.
The data from New Zealand revealed that Electronic Card Retail Sales in May increased by 78.9% following April's decline of 47.5% but failed to help the kiwi find demand. Meanwhile, major Asian equity indexes suffered heavy losses amid renewed concerns over the second wave of coronavirus.
DXY rebounds following Wednesday's slump
On the other hand, the FOMC's dovish outlook on Wednesday weighed on the greenback and caused the US Dollar Index (DXY) to register its lowest daily-close in three months at 96.05. Nevertheless, the USD seems to be showing some resilience against its rivals amid risk aversion and keeping the bearish pressure on NZD/USD intact. As of writing, the DXY was up 0.1% at 96.15.
In the second half of the day, weekly Initial Jobless Claims and Producer Price Index (PPI) data from the US will be looked upon for fresh impetus. Investors will be paying close attention to Wall Street's performance as well. At the moment, the S&P 500 futures are down 1.65% on the day, suggesting that the major stock indices in the US are likely to open deep in the negative territory.
Technical levels to watch for