NZD/USD pares early losses, trades around 0.7030 ahead of US CPI data

• NZD/USD continues to have a tough time finding direction.
• US Dollar Index posts modest daily gains above 92.00.
• Investors await Consumer Price Index data from US.

The NZD/USD pair closed the first day of the week virtually unchanged and edged lower during the Asian trading hours on Tuesday. After falling toward 0.7600, however, the pair managed to erase its losses and was last seen posting small daily gains at 0.7032.

Eyes on US inflation data

The data from New Zealand showed on Tuesday that Electronic Card Retail Sales in March increased by 0.9% following February’s decline of 2.5% but this reading failed to help the kiwi gather strength against its rivals.  

On the other hand, The NFIB Business Optimism Index in the US improved to 98.2 in March from 95.8 in February but was largely ignored by market participants.

Currently, the US Dollar Index is up 0.12% on the day at 92.20 supported by a 1% increase in the 10-year US Treasury bond yield. Later in the session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures. Investors expect the Core CPI to rise to 1.5% on a yearly basis and a stronger-than-expected print could help the greenback continue to outperform its rivals and weigh on NZD/USD.

On Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its Interest Rate Decision and release the Rate Statement. The RBNZ is largely expected to keep its policy rate unchanged at 0.25%.

Technical levels to watch for