• NZD/USD reaches a weekly low at 0.7082, amid a sudden switch on market sentiment.
  • The greenback shrug-off of its losses is up against most G8 currencies.
  • New Zealand GDP is expected to come at 16.3% later this week.
  • US Retail Sales and Initial Jobless Claims could weigh on the US dollar.

The NZD/USD advanced earlier in the day but it has since retreated the gains and some more. The pair is trading at 0.7096, losing 0.30%, having reached a weekly low before the New York session close.

The market sentiment suddenly switched towards a risk-off mode. Before the US stock market opened, the Bureau of Labor Statistics released inflation figures for the US. The Core Consumer Price Index rose by 4% versus 4.3% foreseen by economists, slowing down for the first time in six months. After the release, the US stock indexes rose, the greenback sold off across the board, while the US 10-year yield plummeted below 1.30%. 

At the time of writing, the US Dollar Index is gaining 0.04%, up to 92.65, and is exerting pressure on the NZD/USD pair and most G8 currencies, except for the safe-haven currencies like the Japanese yen and the Swiss franc. 

New Zealand GDP and US Retail Sales would be decisive catalysts of the NZD/USD

Moving back to the NZD/USD, the New Zealand economic docket did not have high impact data on Tuesday. Later on the week, on Thursday’s Asian session, the country’s GDP for the second quarter will be released, and is expected to come at 16.3% on an annual basis.

Concerning the US, Retail Sales data and Initial Jobless Claims will be essential for the greenback. Good readings on Thursday could boost the US dollar and resume the NZD/USD recent downtrend. Nevertheless, poor data coupled with softer inflation numbers could weigh on the greenback, pushing the NZD/USD pair up to challenge 0.7100.

KEY TECHNICAL LEVELS TO WATCH