Prior to the release of US inflation statistics, the NZD/USD records a three-day increase near to 0.6150

Despite the current sideways grind, NZD/USD bulls remain in control around mid-0.6100s as markets await Tuesday's critical US inflation data. It is noteworthy that the recent improvement in New Zealand sentiment and statistics, along with lowered US inflation expectations, have put pressure on the NZD/USD exchange rate.

While the Food Price Index outperformed market forecasts by 0.6% to reach 1.1% over the same month, compared to 2.1% in July, the New Zealand REINZ House Price Index improved to -1.3% MoM in August from -1.4% in July.

Consumers in the US predicted inflation to be 5.75 percent over the next 12 months in August, down from 6.2% in July and the lowest since October 2021, according to the New York Fed's monthly consumer expectations survey data released on Monday. According to new figures from Reuters, inflation expectations for the next three years averaged 2.8% in August as opposed to 3.2% in July.

Reports on Monday that Ukraine is making progress in driving the Russian troops out of some of its territory seems to have strengthened the market's circumspect optimism while also arousing worries about Russia's severe retaliation, which benefited the NZD/USD bulls. It's possible that big economies like China, the United States, the United Kingdom, and Europe will provide extra stimulus in a similar manner. The most recent Wall Street Journal (WSJ) report showing that US gas prices had decreased for the twelfth consecutive week also reduced market pressure and increased the price of gold.

The recent Financial Times (FT) stories revealing divergent viewpoints over US President Joe Biden's chip strategy that challenges China, on the other hand, seem to test the NZD/USD buyers. The cautious attitude also seems to be influenced by Chinese President Xi Jinping's determination to restore Beijing's authority on his first international trip after covid-led lockdowns, as this might heighten US-China relations.

The higher closing price on Wall Street, which ignored the favorable US Treasury yields, indicates that the risk-on attitude in this situation weighed on the US Dollar Index. It should be noted that recent increases in US Treasury rates have reversed, but small gains have been seen in S&P 500 Futures as of the time of publication.

Traders of the NZD/USD pair will be closely watching China's return after the extended weekend. The US CPI for August, however, will be the topic of most discussion. The forecasts show that the headline number will fall from 0.0% to -0.1% MoM while the CPI excluding food and energy is predicted to be stable at 0.3% MoM. The NZD/USD pair may continue to rise if inflation numbers are less than forecast.