NZD/USD is trading softly around 0.6075 in the early Asian session on Tuesday. The New Zealand inflation data is expected to slow more than what the central bank anticipates in Q2, indicating potential rate cuts. Traders are increasing their bets on Fed rate cuts in September.
The NZD/USD pair is facing pressure near 0.6075 due to weaker Chinese economic data and a slight rebound of the US Dollar. The focus will be on US Retail Sales for June and New Zealand Consumer Price Index (CPI) inflation data on Wednesday.
The annual CPI is expected to show a 3.5% increase in Q2, lower than the previous 4.0% reading. On a quarterly basis, the CPI is forecasted to rise 0.6% QoQ in Q2. We might see interest rate cuts as a result of this data, according to Kelly Eckhold, Westpac’s chief economist.
Additionally, weaker-than-expected Chinese Gross Domestic Product (GDP) data has put some bearish pressure on the Kiwi. China’s economy expanded by 4.7% YoY in Q2, compared to 5.3% in Q1.
Market players are anticipating the US Federal Reserve (Fed) to initiate rate cuts in September. There is a 100% likelihood of at least a 25 basis points cut in the fed funds rate when the Federal Open Market Committee (FOMC) meets on September 18.