USD slightly up from multi-week low and gold prices extend higher given retreating yields; NZD awaits Q1 CPI

• USD slightly up from multi-week low given retreating yields
• NZDUSD fluctuates with CPI in focus
• Gold prices extend higher amid COVID resurgence in some parts of the world

USD inched up on Wednesday morning but remained near multi-week low as the retreating bond yields diminished currency’s appeal. The benchmark 10-year yield dropped to around 1.56%, not far from its lowest point since mid-March. By the end of last month, it was once at 1.7760%, highest in 14 months. DXY Index currently trades around 91.25 at press time, down -0.48% from five days ago.

NZD lost 3.39% in March but has recovered about half of the loss so far into April. NZDUSD currently hovers around 0.7172, up about 0.08% since opening. Much of the loss last month was due to the strengthening USD under rising yields. The New Zealand economy has recovered impressively from the pandemic, supported by low interest rates. Strong economic conditions are expected to trigger higher inflation, so investors are focusing on the Q1 CPI which will be released later in the day.

Gold prices have rallied to an 8-week high as some parts of the world have seen COVID resurgence such as India, which has reported an accelerated pace on new infections. Japan has also seen a slow-than-expected recovery speed, as lockdowns remain in major cities and vaccination almost stagnates. On the other hand, increases in gold prices are also attributable to falling yields. XAUUSD is currently trading at 1783.55, up about 0.29% since opening. By the end of last month, it was near 1683 and has recovered aggressively since then.