NZD/USD clings to modest daily gains above 0.6400
- China's decision to raise penalties on IP theft eases trade war concerns.
- US Dollar Index stays in positive territory near 98.30.
- Coming up: Dallas Fed Manufacturing Index data from US.
The NZD/USD pair started the week on an upbeat tone and rose to 0.6430 area but struggled to push higher amid a lack of fresh fundamental drivers. As of writing, the pair was consolidating its daily gains near 0.6415, adding 0.12% on a daily basis.
Easing concerns over a protracted trade conflict between the United States and China helped the NZD find demand at the start of the week. China announced that it will be raising penalties for theft of Intellectual Property (IP), which has been one of the main roadblocks in trade negotiations, in an attempt seen as a gesture toward the US.
USD stays strong after recovering last week
On the other hand, after rising above the 98 handle on the back of Friday's better-than-expected Purchasing Managers' Index (PMI) figures, the US Dollar Index is registering small gains on Monday to make it difficult for the pair to continue to edge higher.
The only data from the US on Monday will be the Federal Reserve Bank of Dallas' Manufacturing Index. Although this data is usually ignored by the markets, investors have been paying close attention to the performance of the US manufacturing sector lately and a large deviation from the market expectation could ramp up the volatility. Experts forecast the reading to slump to -11.3 in November from -5.1 in October.
Technical levels to watch for