NZD/USD slides toward 0.6600 ahead of US inflation data

• China's trade surplus widened less than expected in December. 
• Building Permits in New Zealand declined by 8.5% in November.
• US Dollar Index posts small daily gains above 97.40 ahead of US CPI data.

The NZD/USD pair registered small daily gains during the Asian trading hours but turned south ahead of the American session. As of writing, the pair was down 0.23% on a daily basis at 0.6613.

Earlier in the day, the data from China showed that Trade Surplus in December widened to $46.79 billion from $37.93 billion in November with Exports rising 7.6%. However, this reading came in slightly worse than the market expectation for a surplus of $48 billion and made it difficult for the China-proxy NZD to capitalize on the data.

Additionally, Statistics New Zealand rpeorted that Building Permits in November fell 8.5% to miss analysts' estimate for an increase of 2.1% by a wide margin. 

In the meantime, investors seem to be refraining from making large bets while waiting to see the details of the US-China phase-one trade deal, which is expected to be released ahead of the signing ceremony in Washington on Wednesday.

Eyes on US CPI data

On the other hand, the US Dollar Index is posting small daily gains and fluctuating in a tight range below the 97.50 mark. The Consumer Price Index (CPI) data from the US on Tuesday will be watched closely by the market participants. Previewing the inflation report, "inflation may return to the spotlight at a later stage, as the Fed struggles to live up to the 2% inflation mandate when looking at PCE core inflation. We expect CPI core inflation to rise 2.3% y/y in line with consensus,” said Danske Bank analysts.

Technical levels to watch for