Greenback Slides as Risk Assets Rally; EUR and NZD Hit Multi-Month Highs

The US Dollar (USD) remains under heavy selling pressure at the onset of the trading week, weighed down by a resurgence in risk appetite and mounting political uncertainty in Washington. The greenbacks retreat has opened the door for major G10 currencies to reclaim key technical levels, with the Euro and New Zealand Dollar leading the charge.

EUR/USD and NZD Surge

The EUR/USD pair has consolidated gains, trading around 1.1886, marking its highest level since mid-September. The move reflects broad dollar weakness rather than innate Euro strength, though the technical breakout is drawing momentum buyers.

Similarly, the NZD/USD has extended its winning streak to seven days, touching a fresh four-month high near 0.6000.

Solid manufacturing and services PMI data from India and a constructive outlook for the Singapore Dollar (SGD) are further supporting a stabilizing sentiment in Asian and Emerging Markets, softening demand for the safe-haven dollar.

Equities and Fed Focus

Wall Street opened on firmer footing, with the S&P 500 adding 0.5%, suggesting that equity investors are looking past the immediate political gridlock in the US.

However, the market remains cautious. With a heavy slate of earnings and a critical Federal Reserve decision looming, the divergence between rising stock valuations and a weakening currency suggests traders are betting on a dovish pivot.

Technicals & Key Levels

• EUR/USD: Trading around 1.1886, highly correlated with broad dollar weakness.
• NZD/USD: Touching a four-month high near 0.6000.
• S&P 500: Up 0.5% at the open.