NZD/USD bears stay in control for fresh bear cycle lows

• NZD/USD bears remain in town despite a consolidating US dollar. 
• All eyes will turn to the US inflation data on Wednesday. 

NZD/USD is under pressure by some 0.5% into the closing hours of the North American sessions. The kiwi has fallen from a high of 0.6347 to a low of 0.6276 so far. The US dollar is in a sideways consolidation which is giving the bird some relief ahead of key US inflation data on Wednesday. 

''NZ considerations are being all but ignored by markets and this is the USD show, and it’s benefiting from a flight-to-safety bid amid softness in commodities and risk assets,'' analysts at ANZ Bank said, adding that the US Consumer Price Index data tonight poses binary risks. ''As we noted on Monday, while a softer result (as the street is expecting) will be mildly relieving, a rise in inflation has the potential to trigger another wave of risk aversion (likely at the expense of the Kiwi).''

Meanwhile,m a number of Fed officials on Tuesday advocated the need for 50 basis point hikes at the next meetings. Cleveland Federal Reserve Bank President Loretta Mester argued that raising interest rates in half-point increments "makes perfect sense" for the next couple of Fed meetings. New York Fed President John Williams said that Chair Jerome Powell's indication the central bank will hike by half a percentage point at the next two polict meetings is sensible.

Eyes on US CPI

Tomorrow's CPI is expected to rise by 0.5% MoM in April and headline to rise by 0.3%, as food and energy prices eased,  analysts at ANZ Bank said.

 ''Inflation has probably peaked on a YoY basis, but monthly inflation trends remain stubbornly high and above rates consistent with 2%. Fed Chair Powell wants to reduce the excessive demand in the labour market by achieving a reduction in job openings without unemployment rising. Navigating that path will be challenging.''