NZD/USD remains stuck in tight range below 0.6600 ahead of NZ inflation data
- NZD/USD fluctuates in a 15-pip range on Thursday.
- US Dollar Index extends sideways grind above 97.50.
- Annual CPI in New Zealand is expected to rise to 1.8% in Q4.
The NZD/USD pair is struggling to find direction on Thursday and trading in a very tight 15-pip range below the 0.6600 handle with investors staying on the sidelines ahead of the key inflation data from New Zealand. As of writing, the pair was up 0.05% on the day at 0.6594.
The lack of significant macroeconomic data releases from China and New Zealand caused the pair to stay stuck in its narrow channel. Although the positively-correlated AUD/USD pair gained nearly 40 pips during the Asian trading hours following the upbeat labour market data from Australia, the NZD/USD failed to react.
On the other hand, the greenback's uninspiring performance since the start of the week allows the pair to extend its sideways action. The US Dollar Index, which tracks the USD's value against a basket of six major currencies, seems to have gone into a consolidation phase after meeting resistance near 97.70 on Monday.
Will CPI data bring volatility?
Later in the day, the weekly Initial Jobless Claims and Kansas City Fed's Manufacturing Index from the US will be looked upon for fresh impetus. More importantly, Statistics New Zealand will publish its quarterly inflation report at 21:45 GMT.
Markets expect the Consumer Price Index (CPI) to rise to 1.8% on a yearly basis in the fourth quarter from 1.5% and a lower-than-expected reading could weigh on the NZD as it would allow the Reserve Bank of New Zealand to continue to cut rates without worrying about inflation.
Technical levels to watch for