The NZD/USD has fallen near the convergence of the 20,100 and 200-day SMAs towards the 0.6170-0.6190 range.
RBNZ is expected to hold rates at 5.5%.
Eyes on key CPI figures from the US from June on Wednesday.
The NZD/USD trades with losses at the 0.6195 area while markets await the Reserve Bank of New Zealand (RBNZ) decision early in Wednesday’s session. In addition, all eyes will be on Consumer Price Index (CPI) data from June from the US, which is set to affect the bets on the Federal Reserve regarding its next monetary policy moves.
Eyes on RBNZ’s outlook and inflation data from the US
Wednesday’s highlight will be the Reserve Bank of New Zealand’s (RBNZ) decision, which is expected to hold rates steady at 5.5%. Despite a hawkish stance, the RBNZ has been accused of pushing the economy into a technical recession to push inflation down, so investors will closely watch the bank’s economic outlook and forecasts. In addition, in the Monetary Policy review, investors will look at the bank’s assessment of China’s situation as a weaker demand pulse from China could contribute to lowering inflation.
On the other hand, in the US, the focus is on Wednesday's Consumer Price Index (CPI) data. The headline figure is expected to drop to 3.1% in June YoY from its previous 4%, while the Core measure to 5% from it last figure of 5.3%.
As Federal Reserve’s officials sounded hawkish on Monday, markets believe a 25 basis points (bps) hike in the July meeting is a done deal. Moreover, the odds of another hike this cycle stand at 35%, but those expectations may change according to the outcome of the inflation data in Wednesday’s session
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