The NZDUSD pair is losing momentum for the fourth day in a row, before this week's important economic reports, such as the Nonfarm Payrolls (NFP) and ISM Services PMI, which could provide hints about the scope of the Fed's possible interest rate cuts this month.
US Dollar Index (DXY) Outlook
The decline in Treasury yields is undermining the US currency. The current yield on US Treasury bills is 3.86% for 2-year notes and 3.83% for 10-year notes. However, the ISM Manufacturing PMI, which showed a minor increase from 46.8 in July to 47.2 in August, gave the Greenback more traction.
Technically, the US dollar index (USDX) reached its yearly low and created buying pressure. However, more clues are needed before validating the bottom and initiating a bull run to USD bulls.
RBNZ's Comment on Rate Decision
In the meantime, the ANZ Commodity Price Index in New Zealand increased by 2.1% in August, following a 1.7% decrease in July. Director of S&P Global Ratings Martin Foo voiced worries on Wednesday, pointing out that more narrowing of New Zealand's current account deficit is required. Although Foo expressed broad optimism regarding the country's sovereign rating outlook, he also pointed out the persistent difficulties in funding the current account deficit and the sluggish rate of economic growth.
