- NZD/USD drifts higher to around 0.5920 in Wednesday’s early European session.
- Trump said he will make a Fed Governor decision this week.
- New Zealand’s Unemployment Rate came in at 5.2% in Q2, versus 5.3% expected.
The NZD/USD pair gathers strength to near 0.5920 during the early European session on Wednesday. Increased expectations of a Federal Reserve (Fed) rate cut weigh on the US Dollar (USD). Fed officials are scheduled later on Wednesday, including Susan Collins, Lisa Cook and Mary Daly.
A slew of weaker US economic data, including job data and the ISM Services Purchasing Managers Index (PMI) report, boosts bets of a rate cut by the Fed next month. Financial markets have priced in nearly an 84% chance that the US central bank will reduce rates by 25 basis points (bps) in the September meeting, according to the CME FedWatch tool.
Traders will closely watch the developments surrounding the Fed governor’s replacement. Trump said on Tuesday that he will decide on a short-term replacement for Fed Governor Adriana Kugler, who resigned last Friday. He will also soon reveal a nominee for the next Fed Chair. Trump ruled out US Treasury Secretary Scott Bessent as a candidate to succeed current Chairman Jerome Powell, whose term expires in May 2026. Renewed concerns over the Fed’s independence could exert some selling pressure on the Greenback and create a tailwind for the pair.
New Zealand’s Unemployment Rate was 5.2% in the second quarter, according to figures released by Stats NZ today. This compares with 5.1% in the first quarter, below the market consensus of 5.3%. Traders await the Reserve Bank of New Zealand (RBNZ) Inflation Expectations for the third quarter, which is due later on Thursday. A decrease in expectations could undermine the Kiwi against the USD.
