• NZD/USD has surrendered its entire gains as the focus shifts to US inflation.
• The RBNZ was expected to keep interest rates steady at 5.5% as the economy has already reported a technical recession.
• S&P500 futures have posted decent gains in the London session, portraying strength in the appeal for US equities.

The NZD/USD pair has sharply dropped below the round-level support of 0.6200 after facing significant offers near 0.6240. The Kiwi asset is under severe pressure as the Reserve Bank of New Zealand (RBNZ) kept the interest rate decision unchanged as expected by the market participants.

RBNZ Governor Adrian Orr was expected to keep interest rates steady at 5.5% as the economy has already reported a technical recession and further policy restriction could has weighed more pressure on the economic outlook.

After analyzing RBNZ’s decision, economists at ANZ Bank conveyed we continue to expect a 25 bps hike in the November Monetary Policy Statement (MPS), but this is not today’s story. For now, inflation indicators continue to fall obediently, and the RBNZ’s pause is highly credible.

Meanwhile, S&P500 futures have posted decent gains in the London session, portraying strength in the appeal for US equities. The US Dollar Index (DXY) is demonstrating a non-directional performance after a fragile pullback around 101.50. Volatility in the USD Index has squeezed as investors have been sidelined ahead of the Consumer Price Index (CPI) data, which will release at 12:30 GMT.

Analysts at Well Fargo have forecasted the headline CPI to rise a modest 0.2% in June. Favorable base comparisons due to last year's surge in energy and food prices should set up the year-over-year rate to fall nearly a full percentage point to 3.1%. We look for the core CPI to downshift alongside a decline in core goods prices. The ongoing improvement in supply chains has helped to ease pressure on goods, and we expect vehicle prices to contract in June.