The NZD/USD pair is trading weaker around 0.6090 in the early Asian session on Friday. This comes after the release of softer-than-expected June US CPI inflation data, which has increased the likelihood of Fed rate cuts. The dovish monetary policy statement from the Reserve Bank of New Zealand (RBNZ) has also put pressure on the Kiwi against the USD.
Investors are now closely watching the US June Producer Price Index (PPI) and the preliminary Michigan Consumer Sentiment gauge. The recent US CPI data revealed a yearly rise of 3.0% in June, below market expectations, leading to expectations of a Fed rate cut in September. This has caused the USD to weaken in the near term.
On the other hand, the RBNZ’s decision to keep the Official Cash Rate (OCR) unchanged at 5.5% while hinting at possible rate cuts in August has weighed on the NZD. The performance of the Chinese economy, dairy prices, and New Zealand’s macroeconomic data releases are key factors that influence the movement of the NZD.
Overall, the NZD/USD pair is facing downward pressure due to the combination of factors affecting both currencies. Investors will continue to monitor economic data and central bank policies for further insights into the future direction of the pair.