• NZD/USD remains depressed on Monday amid a modest USD strength.
• A softer risk tone contributes to the offered tone surrounding the pair.
• September Fed rate cut bets cap gains for the USD and lend support.

The NZD/USD pair kicks off the new week on a weaker note and drops to a multi-day trough during the Asian session, albeit finds some support near the 0.6100 round-figure mark. Any meaningful recovery, however, still seems elusive in the wake of a modest US Dollar (USD) strength and the cautious market mood. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs to its highest level since May 9 in the wake of the Federal Reserve's (Fed) hawkish stance, indicating only one rate cut this year. This, along with Friday's better-than-expected release of the flash US PMIs, continues to lend some support to the buck. Meanwhile, persistent geopolitical tensions and political uncertainty in Europe temper investors' appetite for riskier assets, which is seen as another factor that benefits the Greenback's relative safe-haven status and should act as a headwind for the risk-sensitive Kiwi. 

Furthermore, expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates earlier than projected might contribute to capping gains for the NZD/USD pair. In fact, the central bank projected that it will wait until the third quarter of 2025 before cutting rates amid still-elevated inflation. Market players, however, expect the beginning of the rate-cutting cycle early next year in the wake of the recent economic downturn. This, along with China's economic woes, warrants caution before positioning for any recovery for antipodean currencies, including the New Zealand Dollar (NZD).