NZD/USD continues to move sideways above 0.7100 ahead of US inflation data
- NZD/USD continues to fluctuate in a narrow range on Tuesday.
- US Dollar Index stays flat above 92.50 during European session.
- Focus shifts to August CPI data from US.
The NZD/USD pair closed the first day of the week virtually unchanged and continues to move sideways during the first half of the day on Tuesday. As of writing, the pair was down 0.13% at 0.7112.
DXY stays calm ahead of key inflation data
On Monday, the US Dollar Index (DXY) climbed to its strongest level since late August at 92.88 but struggled to preserve its bullish momentum in the second half of the day with falling US Treasury bond yields weighing on the greenback. After losing more than 1%, the benchmark 10-year US T-bond yield is currently up 1% at 1.341, helping the DXY stay around Monday's closing level of 92.60.
Later in the session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for August. Previewing the inflation report, "August's Core CPI figure is critical for the and for markets," noted FXStreet Analyst Yohay Elam. "A read within estimates would keep the dollar bid, a level of 4.5% or more would trigger gains, while 4% or lower could undo recent gains."
US Inflation Preview: CPI critical for taper, three scenarios for the dollar.
Meanwhile, Wall Street's main indexes look to open the day little changed with US stock index futures trading flat on the day.
In the Asian session on Tuesday, second-quarter Current Account data from New Zealand will be looked upon for fresh impetus.
Technical levels to watch for