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  • Building Permits in US rose 9.2% in January. 
  • Annual core PPI in US jumped to 1.7% from 1.1%.
  • Coming up: Speeches by FOMC members Kashkari, Kaplan and FOMC minutes.

The NZD/USD pair came under renewed bearish pressure in the early trading hours of the American session amid broad USD strength and erased its daily gains. As of writing, the pair was trading at 0.6387, where it was virtually unchanged on a daily basis.

DXY extends rally on Wednesday

The data published by the US Bureau of Labor Statistics revealed that the core Producer Price Index (PPI) in January rose to 1.7% on a yearly basis from 1.1% to beat the market expectation of 1.3%. Additionally, despite a 3.6% decline in Housing Starts, Building Permits increased 9.2% to provide a boost to the greenback. The US Dollar Index (DXY) gained traction in the last hour and climbed to its highest level since October 1st at 99.60.

Later in the session, Minneapolis Fed President Neel Kashkari and Dallas Fed President Robert Kaplan are scheduled to deliver speeches. More importantly, the FOMC will publish the minutes of its January 28-29 monetary policy meeting at 19 GMT.

In the meantime, the People’s Bank of China (PBoC) in its monetary policy implementation report noted that the size and the duration of the coronavirus’ impact on the economy will be limited to help the China-proxy NZD show some resilience. The PBoC further added that it will increase credit support to prevent and control of the outbreak.

Technical levels to watch for