- The NZD / USD is having a hard time finding direction on Wednesday.
- New Zealand’s CPI rose modestly in the first quarter.
- The US dollar index is holding on to modest recovery gains.
The pair NZD / USD It advanced to a monthly high of 0.7230 on Tuesday, but took a 180 degree turn to close the day in negative territory. With trading action turning subdued amid a lack of significant fundamental drivers on Wednesday, the pair made a correction and was last seen posting small daily gains at 0.7180.
NZD ignores CPI figures
The observed negative change in risk sentiment helped the dollar find demand on Tuesday and forced the NZD / USD to turn south in the second half of the day.
During the Asian session, New Zealand data revealed that inflation, as measured by the Consumer Price Index (CPI), rose to 1.5% annually in the first quarter from 1.4%. Although this reading was slightly higher than the market expectation of 1.4%, it failed to trigger a notable market reaction.
On the other hand, the US dollar index extends its rebound to a second day in a row on Wednesday and keeps the rise of the NZD / USD limited.
No data will be published on the US economic agenda and investors will closely follow the major Wall Street indices. Currently, S&P 500 futures are down 0.2% and the USD is likely to remain strong should safe-haven flows dominate financial markets in the second half of the day.
Technical levels
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