NZD/USD moves below 0.6000 due to hawkish remarks from Fed’s Kashkari

NZD/USD trades around 0.5990 during the Asian session on Wednesday, marking a second consecutive day of losses. This decline is likely influenced by the Federal Reserve's (Fed) sentiment of maintaining higher interest rates for an extended period. Furthermore, hawkish remarks from Minneapolis Fed President Neel Kashkari have strengthened the US Dollar, thereby exerting downward pressure on the NZD/USD pair.

President Kashkari's comments suggest an expectation for rates to remain unchanged for a significant duration, as reported by Reuters. Although the probability of rate hikes is low, it's not entirely ruled out.

The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, edges higher to near 105.50. The higher US Treasury yields provide support for the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.84% and 4.47%, respectively, by the press time.

Last week, signals from the Reserve Bank of New Zealand (RBNZ) indicated an intention to postpone any move toward monetary easing until 2025, citing higher-than-anticipated inflation pressures in the first quarter. This stance could offer support for the New Zealand Dollar (NZD).

Moreover, the Kiwi market appears unsettled ahead of crucial data releases from its primary trading partner, China. This includes Thursday's Trade Balance data for April and Consumer Price Index readings on Saturday.

In New Zealand, growing concerns regarding the domestic economy have surfaced, particularly following a warning from the Organization for Economic Co-operation and Development (OECD) that Wellington is experiencing lower productivity growth due to inadequate competition, notably in the supermarket sector.