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  • NZD/USD dropped to a fresh five-day low on Wednesday.
  • US Dollar Index rebounds modestly after a two-day consolidation period.
  • Investors await April Consumer Price Index (CPI) data from the US.

The NZD/USD pair fluctuated in a relatively tight range on Tuesday and closed flat at 0.7275 before coming under bearish pressure on Wednesday. As of writing, the pair, which touched a five-day low of 0.7221 earlier in the day, was trading at 0.7235, losing 0.55% on a daily basis.

Focus shifts to US inflation data

In the absence of significant macroeconomic data releases from New Zealand, the risk-averse market environment weighed on the kiwi during the Asian trading hours. Although major European equity indexes are posting recovery gains after losing more than 2% on Tuesday, investors remain cautious ahead of key US data.

The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for April later in the session. Investors expect the Core CPI to rise to 2.3% from 1.6%. A stronger-than-expected print could provide a boost to the greenback in the second half of the day. Supported by safe-haven flows, the US Dollar Index was  clinging to modest gains at 90.25 at the time of press.  

In the meantime, the S&P 500 Futures and the Nasdaq Futures are down 0.2% on the day, suggesting that Wall Street’s main indexes could remain on the back foot and help the USD outperform its rivals in the American session.  

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