NZD/USD posts modest gains above the mid-0.6100s, US Retail Sales eyed

• NZD/USD trades on a positive note near 0.6158 amid the softer USD. 
• Investors have lowered their bets on a 25 basis points (bps) rate cut from the Fed in June. 
• The growing fear about China's economic growth outlook undermined the China-proxy Kiwi. 
• The US February Retail Sales data will be in the spotlight on Thursday. 

The NZD/USD pair trades strongly above the mid-0.6100s during the early Asian session on Thursday. The decline of the US Dollar (USD) provides some support to the pair. The US February Retail Sales data on Thursday might offer some hints about rate-cutting expectations from the Federal Reserve (Fed) next week. The figure is expected to rise by 0.8% m/m. At press time, NZD/USD is trading at 0.6158, gaining 0.02% on the day. 

The rise in both headline and core CPI inflation earlier this week might influence the Fed to cut rates just two times this year and decrease the chance of easing policy in June. Investors have priced in 75% odds of a 25 basis points (bps) rate cut in June, down from 95% at the beginning of the week. The Fed is anticipated to keep the benchmark rate steady in the 5.25%–5.50% range in the March policy meeting next week. The Fed wants to see more evidence that recent disinflation progress is sustainable before starting the policy-easing process.

On the Kiwi front, the growing fear about China's economic growth outlook and the lack of supporting measures from Chinese authorities dampen commodity demand, which exerts some selling pressure on the China-proxy New Zealand Dollar (NZD) and caps the pair’s upside. 

Later on Thursday, investors will closely watch the US Retail Sales for February. The stronger-than-expected data might lift the Greenback against its rivals. On Friday, New Zealand’s Business NZ Performance of Manufacturing Index (PMI) for February will be released. Next week, the Federal Open Market Committee's (FOMC) monetary policy meeting will take center stage. 

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