• NZD/USD recovers some intraday losses as the US Dollar remains under pressure due to firm Fed rate-cut bets.
• Fed Powell recognized the need for more soft inflation data before pivoting to policy normalization.
• NZ Q2 inflation is estimated to have grown steadily by 0.6%.

The NZD/USD pair rebound strongly after discovering buying support near two-month low around 0.6050 in Tuesday’s European session. The Kiwi asset recovers as the US Dollar (USD) remains on the backfoot due to firm expectations that the Federal Reserve (Fed) will start cutting its key interest rates from the September meeting.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to hold its immediate support of 104.00. Meanwhile, investors’ higher risk appetite due to increasing Fed rate-cut prospects has underpinned risk-sensitive assets. S&P 500 futures have posted some losses in European trading hours.

Signs of improving Fed officials’ confidence in the progress in disinflation have boosted expectations for Fed rate cuts in September. Fed Chair Jerome Powell said in his speech at the Economic Club of Washington on Monday, "We've had three better readings, and if you average them, that's a pretty good place," Reuters reported