The NZD/USD pair remains on the defensive around 0.6100 during the early Asian session on Thursday. The downtick of the pair is supported by the dovish shift from the Reserve Bank of New Zealand (RBNZ) following the monetary policy meeting. The attention will shift to the US inflation figures measured by the PCE on Thursday.
Data released from the Commerce Department on Wednesday reported that the US economy grew at a 3.2% annual pace from October through December from a 3.3% initial estimate. The GDP growth rate has now surpassed 2% for six consecutive quarters, despite a forecast that rising interest rates may push the world's largest economy into a recession.
The RBNZ decided to hold the Official Cash Rate (OCR) unchanged at 5.5%, as widely expected in its February monetary policy meeting. However, the Monetary Policy Committee (MPC) stated that the central bank is no longer forecasting additional tightening, though they continue to see OCR risks as tilted to the upside. This, in turn, exerts some selling pressure on the New Zealand Dollar (NZD) and acts as a headwind for the NZD/USD pair.
Moving on, market players will closely watch the US Personal Consumption Expenditures Price Index (PCE) for January on Thursday. Also, the US Personal Income, Personal Spending, Pending Home Sales, and the weekly Initial Jobless Claims are due later in the day and the Fed’s Bostic, Goolsbee, and Mester are due to speak. These events could give a clear direction to the NZD/USD pair.
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