Bulls still have control of the NZD/USD currency pair near the mid-0.6100s as traders wait for US inflation data on Tuesday. The NZD/USD exchange rate is decreasing because people are feeling better, New Zealand’s statistics are looking good, and US inflation forecasts are worsening.

The REINZ House Price Index went from -1.4% MoM in July to -1.3% MoM in August. The Food Price Index went from 2.1% MoM in July to 1.1% in August.

In August, US consumers expected inflation to be 5.75 per cent over the next 12 months, down from 6.2% in July and the lowest since October 2021. Reuters said that the average inflation rate over the next three years is 2.8%, which is the slowest rate since late 2020.

The new issue of the Financial Times (FT) is about how US Vice President Joe Biden’s plan for a chip that challenges China may put NZD/USD buyers to the test. The cautious tone seems to come from Chinese President Xi Jinping wanting to restore Beijing’s power during his first trip abroad after COVID-led lockdowns. It could make the conflict between the US and China worse.

Risk-taking attitudes affected the US Dollar Index, as the fact that Wall Street closed higher, even though US Treasury yields were looking good. US Treasury rates cut back on recent gains, and S&P 500 Futures were up a little at press time.

After the long weekend, NZD/USD traders will watch China. The CPI without food and energy will likely stay at 0.3% MoM.

Conclusion

The NZD/USD pair may increase if US inflation data worsen further.