NZD/USD trades lower on Wednesday, stays directed towards weekly lows.
Lower US Treasury yields undermine the demand for the US dollar.
Risk aversion amid falling equities and downbeat Chinese economic data weighs on Kiwi.
NZD/USD extends the previous session’s losses on Wednesday’s Asian session. The pair opened higher and hovered in a very minute trading band with no meaningful traction.
At the time of writing, NZD/USD is trading at 0.7088, down 0.14% for the day,
The US Dollar Index (DXY), which measures the greenback performance against its six major rivals stays strong near 92.70 despite a downtick in the US 10-year benchmark yields.
The US Treasury yields turns lower to 1.28%, after touching a near two month low of 1.27% early in the week.
Investors remain invested in the greenback in a general risk-averse environment and softer US CPI data. The US Consumer Price Index (CPI) came at 0.3% in August as compared to the previous 0.5% rise, and below the market expectations of 0.5%.
On the other hand, Kiwi lost its momentum on reduced risk appetite among investors in the wake of the renewed COVID-19 restrictions and dismal Chinese data.
It is worth noting that S&P 500 Futures were trading at 4,443.06, down 0.57% for the day.
As per the latest report, China’s Industrial Production rose grew by 5.3% in August on yearly basis, as compared to a 6.4% rise in the previous month and much below the market expectations of 5.8%. The is the weakest growth in the data since July 2020 on COVID-19 curbs and supply chain disruptions. Along with that, Retail sales gained 2.5% in August, falling sharply from 8.5% in the previous month, and missing market consensus of 11.5%.
Being the largest trade partner, risk-prone Kiwi is directly influenced by the downbeat economic data.
As for now, all eyes are on the US Industrial Production data and NY Empire State manufacturing Index to take fresh trading impetus.