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NZD/USD softens to around 0.5960 in Tuesday’s Asian session.  The firmer USD continues to undermine the pair.  New Zealand’s two-year inflation expectations rose to 2.12% in Q4 vs. 2.03% prior.  The NZD/USD pair extends the decline to near 0.5960 during the early Asian session on Tuesday. The New Zealand Dollar (NZD) weakens against the Greenback amid concerns about possible tariffs by Donald Trump’s incoming administration.  Economists expect Trump’s combination of proposed tariffs and tax cuts would put new pressure on inflation and balloon the deficit, making it more challenging for the US Federal Reserve (Fed) to cut the interest rates. According to the CME FedWatch Tool, the markets have priced in nearly 65.3% of the 25 basis points (bps) rate cut by the Fed at the December meeting, down from 75% last week. The odds that the Fed would hold rate steady stand at 34.7%.  Investors await a slew of Fed speakers and the US October Consumer Price Index (CPI) data this week for fresh interest rate guidance. Any signs of hotter inflation might diminish the possibility of a December rate reduction, boosting the Greenback.  On the Kiwi front, New Zealand’s two-year inflation expectations inched higher to 2.12% in the fourth quarter, up from 2.03% in Q3, according to the Reserve Bank of New Zealand’s (RBNZ) latest monetary conditions survey on Monday. Expectations for one-year ahead annual inflation eased to 2.05% in Q4 from 2.40%. The RBNZ trimmed the Official Cash Rate (OCR) by 50 bps to 4.75% on November 27 and is expected to reduce rates by another 50 bps at the November 27 meeting.  New Zealand Dollar FAQs The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s…

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Filed under: News - @ November 12, 2024 1:17 am