• NZD/USD falls to a monthly low near 0.6100 as traders brace for the RBNZ’s policy decision.
• The RBNZ is expected to reduce its OCR further by 50 bps to 4.75%.
• Investors await the US inflation data for fresh guidance on the Fed’s interest rate outlook.

The NZD/USD pair hits the monthly low near the round-level support of 0.6100 in Tuesday’s North American session. The Kiwi pair weakens as the New Zealand Dollar (NZD) is under pressure ahead of the Reserve Bank of New Zealand’s (RBNZ) policy decision, which will be announced on Wednesday.

The RBNZ is expected to cut its Official Cash Rate (OCR) by a larger-than-usual size of 50 basis points (bps) to 4.75% as the central bank is focused on reviving economic growth. The board also reduced its borrowing rates unexpectedly by 25 bps in August.

Meanwhile, weakness in Chinese markets due to the unavailability of specific details for allocation of funds in the stimulus package of 200 billion yuan unveiled by Chairman of the National Development and Reform Commission (NDRC) Zheng Shanjie on Tuesday after the long National Day holiday has failed to prompt recovery in the Kiwi dollar.

On the United States (US) front, the US Dollar (USD) struggles to extend its upside, with investors focusing on the Consumer Price Index (CPI) data for September, which will be announced on Thursday. The inflation data will influence market expectations for the Federal Reserve’s (Fed) interest rate outlook for the remaining year. The core CPI – which excludes volatile food and energy prices – is estimated to have grown steadily by 3.2%.

NZD/USD extends its losing streak for the sixth trading session on Tuesday. The Kiwi pair has discovered temporary support near the 200-day Exponential Moving Average (EMA) around 0.6100.