Kiwi Slumps, Back Near 20-day EMA

NZD/USD losses extended post the Asia close on Tuesday, the pair pulling back sharply. We sit at 0.6250 currently, at session lows and down 1.20%. The Kiwi was the third worst performer in the G10 space for the session, as dollar sentiment rebounded sharply (BBDXY +0.70%).

• Dollar sentiment was aided by rising yields, although we finished away from session highs, the 10yr to 3.94% (+6bps). The US real 10yr yield ticked higher to +1.74%, recent lows were at +1.64%. This came despite weaker than expected US data.
• Equity sentiment was also weaker, with falls in in US bourses (SPX -0.57%, Nasdaq -1.63%), which weighed on higher beta plays. NZD/JPY fell 0.45% to 88.73.
• The local data calendar has house price figures for Dec out later in the London session, but other we are quiet this week. Onshore markets do return today from the new year holiday period.
• Earlier whole milk prices rose 2.5% at the GDT auction. Prices are now back to Feb 2023 levels.
• In terms of technicals the 20-day EMA is not too far away, siting at 0.6245. The pair saw a brief dip through this support level in Dec, but it proved to be a buying opportunity. The 50-day sits back near 0.6140.