- NZD/USD inches lower as the US Dollar remains strong ahead of the Fed’s interest rate decision on Wednesday.
- CME FedWatch Tool suggests the likelihood of a Fed rate cut in September has decreased to 52%.
- The RBNZ is anticipated to maintain its current interest rate until at least mid-2025.
NZD/USD edges lower as traders favor the US Dollar (USD) ahead of the Federal Reserve's (Fed) decision and the release of US inflation figures for May, scheduled for later in the North American trading hours. The NZD/USD pair edges lower to near 0.6140 during the European hours on Wednesday.
The Federal Reserve is widely expected to keep the policy rate unchanged, maintaining it in the range of 5.25%-5.50% in June as it strives to reduce inflation toward its 2% target. The strong US labor market conditions have reduced the chances of a Fed rate cut in September. According to the CME FedWatch Tool, the probability of a Fed rate cut in September by at least 25 basis points has decreased to 52%, down from 67% a week earlier.
Investors will likely closely monitor key US inflation data, which is due later in the North American session. The US headline and core CPI figures for May are projected to show year-over-year increases of 3.4% and 3.5%, respectively.
On Kiwi’s front, consumer inflation remained steady in May, while producer price deflation eased in China, a major trade partner of New Zealand. This situation suggests a need for additional stimulus to boost demand. China's Consumer Price Index (CPI) remained consistent at a 0.3% increase year-over-year in May, falling short of the expected 0.4% rise. On a monthly basis, Chinese CPI decreased by 0.1%, compared to a 0.1% increase in April.
Despite a weakening economy, high interest rates in New Zealand have continued to support the New Zealand Dollar (NZD). The Reserve Bank of New Zealand (RBNZ) is anticipated to maintain its current policy stance until at least mid-2025.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from multi-month tops, back near 1.1050
Following a move to six-month highs in the 1.1140-1.1150 band, EUR/USD now gives away part of those gains on the back of a mild attempt of recovery in the US Dollar as investors continue to assess President Trump's recent annoucements.
GBP/USD off highs, remains well bid near 1.3100
GBP/USD now partially sets aside its earlier advance in favour of fresh peaks just north of the 1.3200 mark, challenging the 1.3100 neighborhood on the back of a tepid bounce from recent multi-month lows in the Greenback.
Gold reclaims $3,100 following deep correction
Gold staged a sharp rebound after coming within a touching distance of $3,050 on Thursday, extending gains beyond $3,120. Falling US Treasury bond yields and the risk-averse market atmosphere following the "Liberation Day" tariffs seem to be helping XAU/USD find a foothold.
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX
Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.