Ella 
On Tuesday, NZD/USD fell to 0.5879, down 0.46%. The NZD/USD trend is largely influenced by market correction expectations and the Federal Reserve’s delay in cutting interest rates at the end of the year. Rising U.S. bond yields also weighed on NZD/USD.
On the economic data front, building permits fell to 1.458 million in March by -4.3%, below expectations and the previous reading. Housing starts also fell sharply, 14.7%, missing estimates of 1.321 million units. However, industrial production rose 0.4% during the month, in line with expectations.
What’s driving NZD/USD’s decline is that markets are now betting that the Fed will be more aggressive. Sentiment has adjusted following strong U.S. data, with the Fed expected to start cutting interest rates in September, with a 70% chance of a second rate cut in December. Market expectations that the Fed will start cutting interest rates in June fell to 25% from 60% last week. Separately, Jerome Powell signaled on Tuesday that he sees no progress on inflation and believes it may take more time for monetary policy to have an effect. The expected recalibration also pushed US Treasury yields, which also favored the US dollar over the New Zealand dollar.
