NZD/USD remains capped under the 0.6200 barrier, investors await US CPI data

• NZD/USD weakens near 0.6172 despite the softer USD in Monday’s Asian session. 
• The mixed US February labour market data and dovish remarks from Fed’s Powell triggered the expectation for rate cuts in June. 
• The upbeat China’s CPI inflation data lifts the Kiwi against the USD. 
• The highlight of this week will be the US February CPI, due on Tuesday.

The NZD/USD pair remains capped under the 0.6200 barrier during the Asian session on Monday. The downtick of the pair might be limited as the US Dollar (USD) is likely to remain on its back foot after the dovish comments from Federal Reserve (Fed) Chair Jerome Powell and the mixed jobs data last week. At press time, NZD/USD is trading at 0.6172, down 0.03% on the day. 

Last week, Fed’s Powell suggested that the path for easing policy may not be far off as the US central bank isn’t far from getting the evidence needed to be confident inflation is returning sustainably to the 2% target. The dovish remarks from Powell triggered the expectation for rate cuts in June, with the market now pricing in 100 basis points (bps) of total easing this year. This, in turn, exerts some selling pressure on the Greenback and acts as a tailwind for the NZD/USD pair. 

On the other hand, the signal of an upward trend in China's main gauge of inflation provides some support to the China-proxy New Zealand Dollar (NZD). The Chinese Consumer Price Index (CPI) rose by 0.7% YoY in February from a 0.8% fall in January, stronger than the estimation of a 0.3% rise. 

The US February CPI will be due on Tuesday. The headline CPI figure is expected to remain steady at 3.1% YoY, while the Core CPI is estimated to ease to 3.7% YoY. Additionally, US Retail Sales will be reported on Thursday, which is projected to improve to 0.7%. The better-than-expected data might lift the USD and cap the upside of the NZD/USD pair.