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  • NZD/USD reversed its direction on the last day of the week.
  • US Dollar Index stays in the positive territory above 90.00.
  • Eyes on high-tier macroeconomic data releases from US.

After closing the first four days of the week in the positive territory, the NZD/USD pair lost its traction on Friday and was last seen losing 0.58% on a daily basis at 0.7249.

The Reserve Bank of New Zealand’s hawkish policy outlook provided a boost to the kiwi earlier this week and NZD/USD touched a fresh three-month high of 0.7317 on Wednesday. However, the renewed USD strength ahead of the weekend seems to be forcing the pair to push lower. The US Dollar Index is currently rising 0.17% on the day at 90.15.

Earlier in the day, the data from New Zealand showed that the Roy Morgan Consumer Confidence Index edged lower to 114 in May from 115.4 in April but this report was largely ignored by market participants.

US inflation data coming up next

Later in the session, the US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data for April alongside the monthly change in Personal Income and Personal Spending.

Investors expect the annual Core PCE Price Index to rise to 2.9% from 1.8% in March. A stronger-than-expected print could help the USD continue to gather strength and force NZD/USD to extend its correction. On the other hand, the possible  negative reaction to a soft PCE inflation reading is likely to weigh on US T-bond yields and hurt the greenback.

The University of Michigan will publish its final revision for May’s Consumer Sentiment Index as well.  

Technical levels to watch for