NZD/USD remains timid around 0.6100 due to investors’ caution

NZD/USD hovers around 0.6120 during the European session on Tuesday. The pair barely moves due to the investors’ caution ahead of ANZ – Roy Morgan Consumer Confidence for June due and US Gross Domestic Product (GDP) for the first quarter (Q1) are set to be released on Thursday. The US Personal Consumption Expenditure (PCE) Price Index will be eyed on Friday.

The Reserve Bank of New Zealand (RBNZ) forecasted during its last policy meeting in May that the central bank wouldn’t start cutting its Official Cash Rate from 5.5% until the third quarter of next year as inflation remains elevated.

According to Bloomberg, China Premier Li Qiang expressed confidence that China is capable of achieving its full-year growth target of around 5%. Qiang warned that decoupling and protectionism would only increase economic operational costs globally. Any change in the Chinese economy could impact the Kiwi market, as China and New Zealand are close trade partners.

The US Dollar received downward pressure from dovish comments from Chicago Fed President Goolsbee. On Monday, Goolsbee said in a chat show on CNBC’s Squawk Box that the Federal Reserve might need to consider whether the restrictive policy is putting too much pressure on the economy.

According to the CME FedWatch Tool, investors are pricing in 67.7% odds of a Fed rate cut in September, compared to 61.5% a week earlier.