NZD/USD stalls below 0.5075 area, awaiting US GDP, PCE inflation data

• New Zealand Dollar's recovery against the USD halts ahead of the top of the weekly channel, at 0.5875.

• The Pair bounced from lows near 0.5800 amid US Dollar weakness after Fed Williams's dovish comments.

• Investors are awaitu¡ing the release of US GDP on Thursday and the PCE Price Index on Friday.

The New Zealand Dollar is trading practically flat against the US Dollar on Thursday, looking for direction below the top of the weekly trading range, at 0.5875, with investors looking from the sidelines ahead of US GDP data today and, more importantly, the PCE Prices Index data on Friday.

The pair bounced up from levels near 0.5800 on Wednesday, favoured by generalised US Dollar weakness after the New York Fed President, John Williams, left the door open for an interest rate cut in September.

Williams said that interest rates are likely to fall at some point and that every meeting is “live” for him, comments taken by the market as a token that a September rate cut is on the table.

Traders, however, remain wary of placing directional bets ahead of key US data releases, with a special interest in Friday’s PCE Prices Index, the Fed’s inflation gauge of choice, that might cement hopes of monetary easing next month.

Headline inflation is forecasted to have grown at a steady 2.6% pace in July, unchanged from the previous month, while the core PCE Price Index is seen ticking up to 2.9% year-on-year, from 2.8% in June.