NZD/USD fluctuates in narrow band near mid-0.63s
- US Pres. Trump and Xi are set to sign an interim trade deal in Chile.
- US Dollar Index sticks to modest daily gains on Tuesday.
- The FOMC is expected to lower the policy rate by 25 basis points on Wednesday.
The NZD/USD pair rose to a daily high of 0.6375 during the Asian trading hours on Tuesday supported by hopes of the United States (US)-China reaching an interim agreement on trade. However, the broad-based USD strength made it difficult for the pair to continue to push higher and dragged it to a session low of 0.6340. As of writing, the pair was virtually unchanged on the day at 0.6345.
Citing a source familiar with talks, Chinese news outlet South China Morning Post (SCMP) on Tuesday reported that US President Trump and his Chinese counterpart Xi were expected to sign phase one of the trade deal on November 17th at the APEC summit in Chile.
USD starts the week on strong footing
On the other hand, the selling pressure surrounding major European currencies at the start of the week and surging US Treasury bond yields helped the US Dollar Index preserve its bullish momentum. After gaining 0.7% last week, the index advanced to its highest level in 12-days at 97.93 on Tuesday and was last up 0.05% on the day at 97.80.
The next significant catalyst for the Greenback will be the US Burea of Economic Analysis' Gross Domestic Product (GDP) data tomorrow and the Federal Reserve's interest rate decision. Ahead of these events, inflation data from Australia during the Asian session on Wednesday could cause sharp fluctuations in the AUD/USD pair and impact the positively-correlated NZD/USD pair's trading action.
Technical levels to consider