NZD/USD advances due to dovish sentiment surrounding the Fed’s interest rates trajectory.
The US Dollar extends its decline due to growing anticipation of a Fed rate cut in September.
The Kiwi Dollar may struggle due to rising odds of an early rate cut by the RBNZ.
NZD/USD trades around 0.5910 during the European session on Wednesday, extending its gains for the second consecutive session after hitting a three-month low at 0.5857 on Monday. This upside of the NZD/USD could be attributed to the dovish sentiment surrounding the Federal Reserve’s (Fed) interest rates trajectory.
The Fed is expected to keep rates unchanged at its policy meeting scheduled for Wednesday. However, there is growing anticipation of a rate cut in September. Additionally, signs of cooling inflation and easing labor market conditions in the United States are further fueling expectations of multiple rate cuts by the Fed this year, potentially totaling three cuts. These speculations are putting pressure on the US Dollar.
In New Zealand, Building Permits dropped by 13.8% month-on-month in June, following an upwardly revised 1.9% decrease in the previous month. This marks the steepest decline since February 2021. Additionally, the ANZ Business Confidence index surged to 27.1 in July from 6.1 in June, marking the first rise in six months and reaching its highest level since February
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