NZD/USD sits near two-week high, just below 0.6700 as traders await US CPI
- NZD/USD gained positive traction for the third successive day, though lacked bullish conviction.
- A positive risk tone extended support to the perceived riskier kiwi amid subdued USD demand.
- Traders seemed reluctant and preferred to wait on the sidelines ahead of the key US CPI report.
The NZD/USD pair traded with a mild positive bias through the early European session and was last seen hovering near a two-week high, just below the 0.6700 mark.
The pair edged higher for the third successive day on Thursday and might now be looking to build on its recent recovery from the 0.6530 area or lowest level since September 2020. A generally positive tone around the equity markets turned out to be a key factor that benefitted the perceived riskier kiwi amid subdued US dollar demand.
The uptick, however, lacked follow-through or a bullish conviction amid rising bets for a 50 bps Fed rate hike move in March, which continued acting as a tailwind for the greenback. The markets seem convinced that the US central bank will tighten its monetary policy at a faster pace than anticipated to combat stubbornly high inflation.
Hence, the market focus will remain glued to the latest US consumer inflation figures, due later during the early North American session. Ahead of the key release, traders might refrain from placing aggressive directional bets, which might further contribute to keeping a lid on any meaningful upside for the NZD/USD pair, at least for now.
Thursday's US economic docket also features the release of the usual Weekly Initial Jobless Claims data. This, along with the US bond yields, would influence the USD price dynamics and provide some impetus to the NZD/USD pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
