- NZD/USD gains ground around 0.5995 amid the softer USD.
- Fed’s Bostic said he expected just one rate cut this year due to persistent inflation and robust economic data.
- The IMF expects that New Zealand will likely lower its cash rate this year.
The NZD/USD pair posts modest gains below the 0.6000 barrier during the early European session on Monday. The modest uptick of the pair is backed by the weakening of the US Dollar Index (DXY) below the mid-104.00s. In the absence of top-tier economic data releases from New Zealand, the USD price dynamic will be the main driver for the NZD/USD pair. The pair currently trades near 0.5995, gaining 0.04% on the day.
The Federal Reserve (Fed) held the benchmark rate to the 5.25%-5.5% range at its March meeting last week. The Fed Chairman Jerome Powell emphasized after that meeting that policymakers are likely to cut interest rates later this year, but only once they have greater confidence that inflation is moving toward its 2% target. That being said, the dovish remarks from the Fed officials might weigh on the US Dollar (USD) and create a tailwind for the NZD/USD pair in the near term.
The US Fed maintained its outlook for the median dot plot for 2024 and hinted at three quarter-point rate cuts this year. However, Fed Bank of Atlanta President Raphael Bostic said on Friday that he expected just one interest rate cut this year instead of the two rate cuts he had forecast due to persistent inflation and stronger-than-anticipated economic data.
On the Kiwi front, the International Monetary Fund (IMF) stated in the report that the Reserve Bank of New Zealand will have scope to start cutting interest rates later this year as inflation returns to its target band. IMF added that inflation in New Zealand is projected to return to its central bank’s 1-3% target in the third quarter of this year.
The Chicago Fed National Activity Index, US New Home Sales for February, and Fed's Bostic speech are due on Monday. On Tuesday, the Durable Goods Orders will be released. The attention will shift to the release of US Gross Domestic Product Annualized on Thursday, which is expected to grow 3.2% in Q4. Traders will take cues from these events and find trading opportunities around the NZD/USD pair.
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 stabilizes above 1.1350 on Easter Friday
EUR/USD enters a consolidation phase above 1.1350 on Friday as the trading action remains subdued, with major markets remaining closed in observance of the Easter Holiday. On Thursday, the European Central Bank (ECB) announced it cut key rates by 25 bps, as expected.
GBP/USD fluctuates below 1.3300, looks to post weekly gains
After setting a new multi-month high near 1.3300 earlier in the week, GBP/USD trades in a narrow band at around 1.32700 on Friday and remains on track to end the week in positive territory. Markets turn quiet on Friday as trading conditions thin out on Easter Holiday.
Gold ends week with impressive gains above $3,300
Gold retreated slightly from the all-time high it touched at $3,357 early Thursday but still gained more than 2% for the week after settling at $3,327. The uncertainty surrounding US-China trade relations caused markets to adopt a cautious stance, boosting safe-haven demand for Gold.
How SEC-Ripple case and ETF prospects could shape XRP’s future
Ripple consolidated above the pivotal $2.00 level while trading at $2.05 at the time of writing on Friday, reflecting neutral sentiment across the crypto market.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
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.