NZD/USD hovers around 0.6360s in choppy trading, eyeing US CPI

• The New Zealand Dollar failed to gain traction despite a risk-on impulse.
• US Dollar remains soft amidst growing speculations for a soft US CPI print.
• China’s reopening could bolster the NZD outlook in the near term.

The NZD/USD prints successive series of doji’s, suggesting that neither buyers nor sellers are in charge, ahead of Thursday’s US Consumer Price Index (CPI) release. Hence, the NZD/USD is trading at 0.6374 above its opening price after hitting a daily high of 0.6388.

Wall Street is set to finish the session with solid gains between 0.56% and 1.24%. The NZD/USD remains in choppy trading as investors brace for the release of crucial US economic data. The consensus estimates that headline inflation in the US, known as the Consumer Price Index (CPI), would drop to 0% MoM, while year-over-year data is expected to decelerate from 7.1% to 6.5%. Excluding volatile items inflation, the so-called core CPI is forecasted to rise 0.3% MoM, while the consensus for annual-based core inflation is 5.7%.

Even though the World Bank’s tweaked its global growth forecasts to the downside, the New Zealand Dollar (NZD) remains linked to China’s economy. China’s reopening could trigger another leg-up in commodities. However, according to ANZ Bank, “tighter global monetary policy in the second half of the year” could help curb commodity inflation.

In the meantime, the US Dollar Index, a gauge of the buck’s value vs. its peers, continues to weaken, down by 0.05%, though it remains hovering around the 103.200 area.

Therefore, the NZD/USD might continue to trade sideways as traders get ready for US economic data releases. However, the New Zealand (NZ) docket will unveil Building Permits for December.

NZD/USD Key Technical Levels