NZD/USD appreciates to near 0.6100 as traders await US inflation


content provided with permission by FXStreet


  • NZD/USD
    rebounds
    ahead
    of
    US
    Consumer
    Price
    Index
    (CPI)
    data
    scheduled
    for
    Thursday.

  • The
    US
    core
    CPI
    is
    expected
    to
    remain
    steady
    at
    3.4%
    year-over-year
    in
    June.

  • The
    New
    Zealand
    Dollar
    may
    limit
    its
    upside
    due
    to
    dovish
    sentiment
    surrounding
    the
    RBNZ.


NZD/USD

recovers
its
recent
losses,
trading
around
0.6090
during
the
European
session
on
Thursday.
Traders
await
the
release
of
the
upcoming
US
Consumer
Price
Index
(CPI)
data
for
June,
scheduled
for
release
on
Thursday,
for
more
clarity
on
the
Federal
Reserve’s
(Fed)
monetary
policy
direction.

Market
forecasts
generally
predict
that
the
annualized
US
core

CPI

for
the
year
ending
in
June
will
remain
steady
at
3.4%.
Meanwhile,
headline
CPI
inflation
is
expected
to
increase
to
0.1%
month-over-month
in
June,
compared
to
the
previous
flat
reading
of
0.0%.

Meanwhile,
on
Wednesday,
Federal
Reserve
(Fed)

Chairman
Jerome
Powell

underscored
the
importance
of
closely
monitoring
the
labor
market,
highlighting
its
significant
deterioration.
Additionally,
Powell
expressed
confidence
in
the
downward
trend
of
inflation,
following
his
remarks
on
Tuesday
that
emphasized
the
necessity
of
further
data
to
strengthen
confidence
in
the
inflation

outlook
.

The
New
Zealand
Dollar
(NZD)
faced
pressure
following
the
Reserve
Bank
of
New
Zealand’s
(RBNZ)
dovish
monetary
policy
statement.
The
central
bank
held
its
cash
rate
steady
at
5.5%
on
Wednesday
as
expected but
hinted
at
possible
rate
cuts
in
August
if
inflation
decreases
as
anticipated.

ING’s
FX
strategist
Francesco
Pesole
observed,
“The
Bank
displayed
greater
confidence
in
disinflation
in
the
statement,
noting
that
‘restrictive
monetary
policy
has
significantly
reduced
consumer
price
inflation.”


Read
the
full
article:
A
surprise
dovish
tilt
by
the
RBNZ

ING

Economic
Indicator

Consumer
Price
Index
ex
Food
&
Energy
(YoY)

Inflationary
or
deflationary
tendencies
are
measured
by
periodically
summing
the
prices
of
a
basket
of
representative
goods
and
services
and
presenting
the
data
as
the
Consumer
Price
Index
(CPI).
CPI
data
is
compiled
on
a
monthly
basis
and
released
by
the

US
Department
of
Labor
Statistics
.
The
YoY
reading
compares
the
prices
of
goods
in
the
reference
month
to
the
same
month
a
year
earlier.
The
CPI
Ex
Food
&
Energy
excludes
the
so-called
more
volatile
food
and
energy
components
to
give
a
more
accurate
measurement
of
price
pressures.
Generally
speaking,
a
high
reading
is
bullish
for
the
US
Dollar
(USD),
while
a
low
reading
is
seen
as
bearish.



Read
more.