TOKYO, Feb 28 — The US dollar held steady as traders brushed off durable goods data overnight and awaited the Federal Reserve’s preferred measure of inflation due tomorrow for clues on when the US central bank may start cutting interest rates.

The Reserve Bank of New Zealand’s (RBNZ) interest rate decision later in the Asian morning also has market participants on edge, with the New Zealand dollar calm ahead of what could turn out to be a significant policy meeting.

In the US, the Commerce Department’s Census Bureau said orders for durable goods fell 6.1 per cent last month, exceeding the 4.5 per cent decline forecast by economists polled by Reuters.

The data did not seem to faze the market, with all eyes on the US core personal consumption expenditures (PCE) price index due tomorrow. Forecasts are for a rise of 0.4 per cent.

“FX markets appear to be taking a nap in the run up to the core PCE print later in the week,” said Charu Chanana, head of currency strategy at Saxo.

Markets have largely priced out a rate cut at both the Fed’s March and May meeting, CME’s FedWatch Tool showed, following strong US consumer and producer price data. The chance of a cut in June sits around 51 per cent.

The US dollar index, which measures the currency against a basket of peers, hovered around 103.82.

With market expectations more closely aligned with the Fed’s latest projections and comments, traders would only respond if they see a trend break in tier one data, “particularly hinting at growth weakness,” said Chanana.

“Meanwhile, the focus will be outside the US, particularly RBNZ meeting today or Eurozone inflation on Friday, to revive some level of volatility in the FX markets.”

The euro consolidated as Europe awaited its own slew of inflation reports, with German states, France and Spain scheduled to release inflation data tomorrow ahead of the euro area’s figures due on Friday.

The euro was mostly unchanged versus the greenback at US$1.0844. It has been rising since mid-February, when it hit its lowest since November 14.

Elsewhere, the kiwi held firm at US$0.6171, as traders braced for the RBNZ’s decision.

Markets are pricing in a one-in-three chance the RBNZ will raise its 5.5 per cent official cash rate to combat stubborn inflation, and all but one of the 28 economists polled by Reuters expect the RBNZ to keep its cash rate at a 15-year high of 5.50 per cent.

The Australian dollar was mostly unchanged at US$0.65455 ahead of monthly consumer price data due at 0030 GMT. Annual inflation is expected to accelerate to 3.6 per cent from 3.4 per cent.

The yen, meanwhile, was holding around 150.52 per dollar after strengthening as much as 150.08 against the greenback overnight.

Inflation data yesterday showed Japan’s core consumer inflation exceeded forecasts and kept alive some expectations that the Bank of Japan might end negative interest rates by April.

In cryptocurrencies, bitcoin was last up 0.54 per cent at US$57,035.76 as it continued to surge after jumping to a more than two-year high above US$57,000 yesterday. — Reuters