NZD/USD continues to trade in tight range below 0.6300

• Markets are waiting for the G7 to announce its response to coronavirus.
• RBA cut its policy rate by 25 basis points on Tuesday.
• US Dollar Index posts small daily gains above 97.50 ahead of mid-tier data.

The NZD/USD pair edged higher during the Asian trading hours but struggled to preserve its momentum. After touching a daily high of 0.6282, the pair has gone into a consolidation phase and was last seen trading at 0.6269, adding 0.15% on the day.

The Reserve Bank of Australia has lowered its policy rate by 25 basis points to 0.5% on Tuesday. However, the AUD gathered strength after this announcement as experts were speculating a 50 basis points rate cut and helped the NZD/USD pair gain traction. 

On the other hand, in its monthly report, New Zealand Treasury noted that the global spread of the coronavirus was increasing the risks of a substantial negative impact that may last for several quarters. 

US Dollar Index modestly higher ahead of G7 statement, mid-tier data

Markets are now waiting for the G7 to announce its coordinated response to the crisis after central bankers' and finance ministers' emergency call at 12:00 GMT. Although Reuters on Tuesday reported that the group was unlikely to opt out for coordinated rate cuts, the statement could trigger a significant market reaction. 

In the meantime, the US Dollar Index is posting modest gains above the 97.50 handle on Tuesday to make it difficult for the pair to push higher. Later in the session, the ISM-NY Business Conditions Index and the IND/TIPP Economic Optimism Index from the US will be looked upon for fresh impetus. 

Technical levels to watch for