Ella 
NZD/USD remained in bearish territory for the fourth consecutive day in early Asian trading on Tuesday. The pair oscillated lower amid growing expectations that the Reserve Bank of New Zealand will cut interest rates sooner or later.
Weak consumer price index (CPI) inflation in the second quarter (Q2) of New Zealand fueled bets that the Reserve Bank of New Zealand will cut interest rates earlier than expected. This, in turn, weighed on the NZD in the short term. Inflation fell to 0.4% in the second quarter from 0.6% in the first quarter, with annual inflation at 3.3%, compared to 4.0% in the previous period.
In addition, the People’s Bank of China (PBoC) unexpectedly cut interest rates on Monday, which is New Zealand’s largest import and export trading partner, weighed on the NZD/USD, the currency that represents China. The People’s Bank of China decided to cut the one-year and five-year loan prime rates (LPR), the benchmark interest rate at which banks lend to customers, by 10 basis points.
On the dollar side, Federal Reserve Chairman Jerome Powell noted that he was more hopeful about progress in tackling inflation in recent months. Meanwhile, Federal Reserve Governor Christopher Waller said the time for a policy rate cut is getting closer. The CME FedWatch tool shows that traders are currently pricing in a less than 5% chance of a rate cut at the July meeting and firmly expect a rate cut in September.
