Positive Tsy Update And Weaker US Dollar Supports NZD/USD

NZD/USD has pushed back over the 0.71 handle, last up 20 pips at 0.7108. The pair was initially pressured by a blip higher in the US dollar, but as the session has worn on and Messrs. Schumer, McConnell and McCarthy have indicated progress is being made and an agreement may be reached, DXY has resumed its downtrend.

• Earlier in the session the New Zealand Treasury released its half year economic fiscal update. The release initially had little effect on markets but seems to be supporting risk sentiment as the session wears on. The release outlined a slightly more positive case than the previous update. 2020/21 annual average GDP growth is forecast at 1.5% compared to the previous estimate of -0.5%, while the 2020/21 bond programme forecast has been cut to NZD 31.7bn. Forecasts for unemployment were downgraded to 6.9% from 7.8%.
• The pair is around 12 pips off the highest level since April 2018 at 0.7120 which was briefly touched on Monday.