NZD/USD remains stuck in narrow range below 0.6400 ahead of key events

• Coronavirus outbreak is expected to weigh heavily on Chinese economy.
• US Dollar Index consolidates gains below 99 handle.
• Coming up: FOMC Chairman Powell's testimony and RBNZ rate decision.

The NZD/USD pair edged lower during the Asian trading hours and touched its worst level since mid-November at 0.6378 before erasing its losses ahead of key macroeconomic events. As of writing, the pair was trading at 0.6394, adding 0.17% on a daily basis.

China-proxy antipodeans continue to have a hard time finding demand amid concerns over the potential negative impact of the coronavirus outbreak on the Chinese economy.

Earlier in the day, Zeng Gang, Vice-Chair of the National Institute for Finance and Development, a Chinese government think tank, said that the coronavirus outbreak could trim the country’s full-year economic growth rate by as much as 1% in 2020. On a similar note, Goldman Sachs slashed its 2020 GDP forecast for China to 5.2% from 5.8%. 

Eyes on Powell's testimony and RBNZ

On the other hand, ahead of the FOMC Chairman Powell's testimony before the Committee on Financial Services of the Congress, the US Dollar Index is posting modest losses to allow the pair to stay in the positive territory.

In the early trading hours of the Asian session on Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its interest rate decision and publish the monetary policy statement. 

Previewing the event, “we expect the RBNZ to retain an easing bias at its Monetary Policy Statement on Wednesday, although it will probably be described as a conditional one, dependent on the impact of the coronavirus pandemic,” said Westpac analysts.

Technical levels to watch for