NZD/USD loses bullish momentum before reaching 0.7100, eyes on US data
- NZD/USD closed the first four days of the week in the positive territory.
- Trade surplus in New Zealand continued to widen in May.
- Core PCE inflation in US is expected to rise to 3.4% on a yearly basis.
The NZD/USD pair closed in the positive territory for four straight days and continued to push higher toward 0.7100 on Friday. With investors moving to the sidelines ahead of key data releases from the US, however, the pair lost its momentum and was last seen posting small daily gains at 0.7070.
Earlier in the day, the data from New Zealand revealed that the trade surplus in May widened to NZD469 million from NZD414 million in May. Nevertheless, this reading failed to trigger a noticeable market reaction.
DXY stays below 92.00 on Friday
On the other hand, the US Dollar Index (DXY) continues to fluctuate in a relatively tight range below 92.00, helping NZD/USD cling to this week's recovery gains. Later in the session, the US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data for May. Investors expect the Core PCE Price Index to rise to 3.4% on a yearly basis from 3.1% in April. A stronger-than-expected reading could help the USD gather strength ahead of the weekend and limit NZD/USD's upside.
The University of Michigan's Consumer Sentiment Index for June will be featured in the US economic docket as well.
Meanwhile, Wall Street's main indexes remain on track to open modestly higher following Thursday's rally. In case risk flows dominate the financial markets in the second half of the day, the greenback could find it difficult to attract investors.
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.
