NZDUSD – What to Watch for in PCE Inflation Data

The New Zealand dollar trades around $0.6129 (NZD/USD), maintaining stability amid a steady US dollar (USD). This comes as investors adjust their expectations regarding potential rate cuts by the Federal Reserve later this year, following positive US economic data last week.

NZDUSD – What to Watch for in PCE Inflation Data

Bloomberg—This Friday, all eyes will be on the US PCE inflation data, the Federal Reserve’s preferred inflation measure. This report will offer further insights into when the Fed might begin to ease policy rates, a critical factor for forex traders and investors.

The Kiwi dollar is also supported by the Reserve Bank of New Zealand’s (RBNZ) recent decision to maintain a hawkish stance. The central bank raised its forecast for peak rates and delayed the timing of a rate cut. Last week, the RBNZ kept its cash rate at a 15-year high of 5.5% for the seventh consecutive time, emphasizing the need for restrictive policy to bring inflation back to target.

Governor Adrian Orr’s Remarks

However, RBNZ Governor Adrian Orr noted that the chances of another rate hike are slim. The bank would only consider tightening policy further if necessary to control inflation expectations.

Conclusion

Forex traders should monitor the upcoming US PCE inflation data and RBNZ’s policy decisions closely. These factors are crucial for making informed trading decisions in the NZD/USD market.

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