- NZD/USD pushes higher after testing 0.6500 on Tuesday.
- US Dollar Index drops below 96.00 amid positive market sentiment.
- Industrial Production data will be featured in the US economic docket.
The NZD/USD pair dropped to 0.6500 on Tuesday but closed the day flat at 0.6540. With risk-on flows starting to dominate the financial markets on Wednesday, the pair gained traction and rose to a daily high of 0.6572. As of writing, NZD/USD was trading a couple of pips below that level, gaining 0.47% on a daily basis.
Upbeat mood weighs on USD
In the absence of significant macroeconomic data releases on Wednesday, risk perception remains as the primary driver of currencies’ performance. Earlier in the day, reports showed that Moderna’s coronavirus vaccine candidate showed promising results. Additionally, ITV’s political editor Robert Peston said Oxford’s COVID-19 vaccine was generating “the kind of antibody and T-cell (killer cell) response that the researchers would hope to see.”
Boosted by these developments, the risk-sensitive NZD is gathering strength against its rivals. On the other hand, the greenback continues to lose interest as a safe-haven with the US Dollar Index slumping to fresh five-week lows below 96.00.
In the second half of the day, Industrial Production and NY Empire State Manufacturing data will be featured in the US economic docket. More importantly, investors will keep a close eye on Wall Street’s performance. At the moment, the S&P 500 futures are up 1.1% on the day.