NZD/USD juggles below 0.6500, yields surge near 3% ahead of US Inflation

• NZD/USD is oscillating below 0.6500 as investors are sidelined ahead of the US inflation.
• The US CPI may remain unchanged at 8.3% while the core CPI will see a slump to 5.9%.
• NZ FinMin Grant Robertson dictated that the tailwinds of lower jobless rates and debt are supporting growth levels.

The NZD/USD pair is auctioning in a narrow range of 0.6470-0.6480 in the Asian session. A corrective move after failing to overstep the psychological resistance of 0.6500 on Tuesday may turn into an initiative buying structure ahead of the flat US Consumer Price Index (CPI), which is due on Friday.

The market participants have forecasted that the US inflation will remain unchanged at 8.3% on an annual basis. Higher oil and commodity prices are keeping the price pressures at elevated levels despite the two rate hike announcements by the Federal Reserve (Fed) in March and May. While the core CPI that doesn’t include food and energy prices is expected to slip to 5.9% from the prior print of 6.2%.

Advancing odds of higher inflation is strengthening the US Treasury yields. The 10-year US Treasury yields have jumped to near 3% as higher inflation will bolster the chances of one more jumbo rate hike by the Fed next week. Upbeat employment data and soaring inflation will be taken care of by a 50 basis point (bps) interest rate hike.

On the kiwi front, the antipodean is expected to gain strength on optimist commentary from New Zealand Finance Minister (FinMin) Grant Robertson. According to NZ FinMin Robertson, the kiwi economy is facing the headwinds of rising costs but with the presence of a low jobless rate, decent growth levels, and low debt. The favorable catalysts will safeguard the prospects in a challenging year. A light economic calendar will enhance the dominance of the greenback but next week, investors’ focus will be on the kiwi Gross Domestic Product (GDP) numbers.