Market Analysis
The NZD/USD pair is currently consolidating near the key level of 0.6000 during the late Asian session on Monday. Investors are holding back ahead of the Reserve Bank of New Zealand's (RBNZ) upcoming interest rate decision scheduled for Wednesday.
Expectations are widespread that the RBNZ will maintain its interest rates at 5.5%, given the significant inflationary pressures, which are notably higher than the desired 2% rate. RBNZ Governor Adrian Orr previously mentioned that efforts are underway to bring inflation back within the target range.
Investors are particularly interested in any indications regarding the timing of potential rate cuts by the RBNZ. Concerns over New Zealand's economic outlook, exacerbated by a technical recession in the latter part of 2023, may fuel expectations for earlier rate reductions.
In the Tokyo session, S&P 500 futures experienced some declines, reflecting a sense of uncertainty among market participants. Meanwhile, 10-year US Treasury yields have risen to 4.43%.
Investor caution persists following the positive US Nonfarm Payrolls report for March, which has tempered speculation about the Federal Reserve considering interest rate cuts starting from its June meeting.
The US Dollar Index (DXY) remains rangebound, trading within Friday's range around 104.30. Market attention is now turning towards Wednesday's release of March inflation data, which could offer insights into the potential timing of interest rate adjustments by the Federal Reserve.
Paraphrasing text from "FX Street" all rights reserved by the original author.