NZD/USD crawls up to fresh 7-week highs at 0.6175

• NZD/USD appreciates for the sixth day in a row to hit 0.6175 high.
• The US dollar loses ground after a string of grim US indicators.
• The kiwi might be about to take a break after rallying nearly 3% this week.

The New Zealand dollar has been buoyed by USD weakness to tick up above 0.6150 reaching the top range of 0.6100 for the first time since mid-March. With this move, the NZD/USD extends a six-day uptrend from 0.5915 and is on track to a nearly 3% rally this week.

US dollar hit by downbeat macroeconomic figures

The US dollar is dropping across the board on Thursday, with downbeat US indicators increasing investors’ fears about the economic impact of the COVID-19 shutdown. US Personal Consumption has posted the largest decline on record, with a 7.5% fall in March, while the Personal Income contracting 2%. Somewhat later, the Labor Department announced that 3.8% million Americans applied for unemployment benefits on the week of April 25th.

Macroeconomic figures have hurt market sentiment today, triggering declines on US stock markets. Likewise, the Dollar Index, which measures USD value against a basket of the most traded currencies, has dropped to its lowest level in two weeks.  

NZD/USD might be reaching a near-term top

Regarding the near-term outlook, FX strategists at UOB suggest that the pair might take a break after reaching 0.6180: “Conditions remain overbought and for today, NZD is unlikely to strengthen much further. In other words, NZD is likely to take a break and consolidate at these higher levels. Expected range for today, 0.6080/0.6145.”

NZD/USD key levels to watch