The NZD/USD is currently trying to stabilize at 0.6244 after being put on the back foot by a stronger US dollar and a generalized sentiment of risk-off in the markets. Unsettling US data, renewed inflation fears, and bumpy trade are all still present. Midday on Wall Street, US stocks began to decline as a consumer confidence indicator dropped amid rising inflation predictions, undercutting the uptick in market enthusiasm following China’s relaxation of some COVID-19 restrictions.

The trading ranges for the New Zealand dollar increasing narrowed over the past week or two, and the daily move lower now appears concerning from a technical standpoint with the confirmation of a break out of the “bearish pennant”.

Consumer confidence may decline to 98.7 in June from 103.2 in May, while the Conference Board’s inflation expectations index may jumpto 8% from 7.5 percent, the highest since the series began in 1987. “The drop in expectations might return the index to levels last seen in 2013.

The average 12-month inflation projection may increase to 8.0 percent from 7.5 percent, according to ANZ Bank analysts. “The FOMC will not like it, and if greater surveyed inflation expectations, the FOMC may force to boost rates by another 75 basis points in July.’

Conclusion

NZD/USD get local confidence numbers later this week, but both business and consumer sentiment have already plummeted, and there doesn’t appear to be anything to shout about for the NZD.