NZD/USD extends sideways grind below 0.6450 ahead of US retail sales data
- Mixed market sentiment doesn't allow NZD to gather strength.
- US Dollar Index stays above 99 handle on Friday.
- Coming up: Retail Sales, Industrial Production data from US.
After rising toward the 0.6500 handle on the back of the Reserve Bank of New Zealand's hawkish policy outlook on Wednesday, the NZD/USD pair lost its traction and registered small losses on Thursday. With the market action turning subdued ahead of key data releases from the US, the pair is moving sideways below near 0.6440.
The only data from New Zealand on Friday revealed that the Food Price Index in January rose 2.1% following Decembers decline of 0.2% but was largely ignored by the market participants. In the meantime, China’s National Health Commission (NHC) announced that the total number of coronavirus infections rose to 63,851 as of Friday morning to make it hard for the China-proxy NZD to find demand.
Eyes on US data
On the other hand, the US Dollar Index, which advanced to its highest level since early October at 99.16, seems to be consolidating its gains ahead of key data releases from the US and helping the pair limit its downside for the time being. As of writing, the index was down 0.04% on the day at 99.06.
Retail Sales, Industrial Production and the University of Michigan's Consumer Confidence Index will be featured in the US economic docket on Friday. Industrial Production is expected to decline by 0.2% in January and a better-than-expected reading could provide a boost to the greenback.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
