NZD/USD remains capped below the 0.6200 barrier following FOMC Minutes, focus on US PMI data

The NZD/USD pair trades on a weaker note below the 0.6200 barrier during the early Asian section on Thursday. The January FOMC Minutes showed that policymakers will need to have greater confidence that inflation will return to target sustainably before cutting rates. NZD/USD currently trades near 0.6177, down 0.05% on the day. 

According to minutes of the FOMC released Wednesday, Federal Reserve (Fed) officials were in no hurry to cut interest rates. Most participants said no cuts would be coming until the central bank held “greater confidence” that inflation was receding. The Fed members will assess both upside and downside risks and are worried about lowering rates too quickly. Traders have pushed out the first rate cut from the March to June meeting, and the expected level of cuts for 2024 is lowered to four from six.  

On the Kiwi front, Statistics New Zealand revealed on Wednesday that the nation’s annualized Trade Balance narrowed to -12.5 billion YoY in January compared to the previous reading of -13.62 billion YoY (revised from -13.57 billion). Meanwhile, Imports came in at 5.91 billion versus 6.22 billion prior. Exports arrived at 4.93 billion from the previous month's 5.85 billion. 

Looking ahead, investors will keep an eye on the US S&P Global PMI data, the usual US weekly Initial Jobless Claims, Existing Home Sales, and the Chicago Fed National Activity Index. Additionally, FOMC’s Cook, Kashkari, Jefferson, and Harker are set to speak later in the day. On Friday, the New Zealand Retail Sales for the fourth quarter (Q4) will be released.