Ella 
NZD/USD attracted some bargain hunting during the Asian session on Tuesday, but lacked follow-through and remained confined to the previous day’s range. Spot prices are currently trading around the 0.6170-0.6175 range and appear to have halted the recent decline from the highest levels since February 22 hit last week.
The U.S. dollar (USD) continues to struggle to attract meaningful buyers or build on its recovery from near two-month lows amid mixed U.S. jobs reports on Friday and bets on a shift in the Federal Reserve’s (FED) policy stance. Indeed, markets now view it as more likely that the U.S. central bank will begin cutting interest rates in June, reinforced by a further decline in U.S. Treasury yields. This, in turn, puts USD bulls on the defensive and provides some support to NZD/USD.
In addition, the positive tone of US stock futures is also seen as another factor weakening the safe-haven currency US dollar, and further benefiting the risk-sensitive currency NZD/USD. However, traders seemed reluctant to take large positions, preferring to wait for the release of the latest U.S. consumer inflation data. The all-important U.S. CPI report will play a key role in influencing market expectations for the Fed’s path to cutting interest rates and driving demand for the dollar. Therefore, caution is required before positioning for any further appreciation moves in NZD/USD.
Investors this week will also have New Zealand’s food price index released on Wednesday, followed by monthly retail sales data and the producer price index (PPI) from the United States on Thursday. This could further provide some meaningful impetus to the NZD/USD pair and potentially determine the next directional move.
