NZD/USD approaches 0.6220 gently amid subdued US Dollar, NZ Inflation eyed

• NZD/USD is gently marching towards 0.6220 amid a subdued performance in the USD Index.
• S&P500 futures have extended their losses as investors are worried about further performance from equities.
• NZ inflation is expected to get stubborn further despite higher rates by the RBNZ.

The NZD/USD pair is showing a lethargic action in the Asian session after defending the round-level support of 0.6200. The Kiwi asset is approaching the 0.6220 resistance amid a subdued performance by the US Dollar Index (DXY).

S&P500 futures have extended their losses as investors are worried about further performance from equities, portraying a cautious performance. A mixed performance has been observed from US commercial banks yet. Earlier, investors were anxious over the quarterly performance of banking stocks after turmoil in March and tight credit conditions by them.

The US Dollar Index (DXY) is hovering above 101.78 after a steep correction. The USD Index failed to show a power-pack action despite hawkish commentaries from Federal Reserve (Fed) policymakers. St. Louis Fed President James Bullard advocated for the continuation of the policy-tightening spell by the central bank considering the fact that labor market data is still solid, as reported by Reuters.

Fed policymaker believes that overall consumption gets fueled by strong labor demand, which fades the chances of a recession in the second half of 2023.

On the New Zealand Dollar front, investors are awaiting the release of the quarterly inflation data, which is scheduled for Thursday. According to the consensus, NZ Consumer Price Index (CPI) has accelerated by 2.0% in the first quarter of CY2023, higher than the former pace of 1.4%. Annual NZ inflation data has scaled to 7.5% from the former release of 7.2%. Households in the NZ economy are expected to face an extreme burden as NZ inflation is getting stubborn dramatically despite higher rates by the Reserve Bank of New Zealand (RBNZ).

This also conveys that RBNZ Governor Adrian Orr would continue hiking rates further to put a lid on galloping inflation.