Dollar Recovers As Euro Bulls Pause on Month-End Flows, New Zealand Dollar Maintains Gain

Dollar Recovers As Euro Bulls Pause on Month-End Flows, New Zealand Dollar Maintains Gain

As markets prepare to conclude the US session, the dollar is fighting back. On the other side, the Canadian Dollar is currently being sold. The euro and the Swiss franc are also falling in value. Overall, though, markets remain mixed, with European indices trading sideways while US futures are rising.

While financial markets chill and the dollar recovers, the EUR/USD is trading around 1.2180. The euro has been unable to profit from the decline of European covid cases. Investors are anticipating the publication of the US GDP, Durable Goods Orders, and other data on Thursday.

The US dollar’s rally across the board pulled the EUR/USD lower. The DXY recovered and climbed to 90.05. After two days of losses, it is up 0.35 percent. DXY recovered from multi-month lows despite a move to the downside in US rates and a comeback in market prices. Even as US rates remained near daily lows, the US dollar recovered more.

Increased demand for the dollar toward the end of the month, as well as dovish comments from ECB officials, have impacted the Euro, which has fallen from a new 19-week high (1.2266) on Wednesday.

New Zealand Dollar Maintains Gains

In May, the RBNZ was less dovish than it had been a month before. It raised the inflation projection and lowered the unemployment rate down while keeping all other monetary policy measures unchanged. The first-rate hike has also been pushed back to 3Q22 by the central bank. Following the announcement, the Kiwi rose to its highest level since February.

During the American session, the NZD/USD corrected lower and fell to 0.7282, after earlier touching 0.7315, the highest level since February 26. Among the G10 currencies, the kiwi is the strongest performer on Wednesday.

Despite the recent retracement, NZD/USD is still on track to close at its highest level since February. More gains should be possible if the price closes over 0.7300. A drop below 0.7250, on the other hand, would reverse the bullish tilt.

The kiwi’s rise brought the ADU/NZD cross to its lowest level in four months. The ANZD/USD pair is having its worst day in months, having broken through the 1.0700 support level. It reached a low of 1.0623 and is still under pressure at the bottom.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.