Anna 
After experiencing two days of losses, the NZD/USD pair rebounded during the early European session on Monday, reaching near 0.6110. Despite prevailing risk aversion sentiment following a drone attack on a US post in Jordan on Sunday, the NZD/USD pair moved upward, benefiting from a stable US Dollar (USD).
The New Zealand Dollar (NZD) found support from the People’s Bank of China (PBoC) considering a potential cut in the Medium-term Lending Facility (MLF) rate. Given the close trade partnership between China and New Zealand, developments in China’s monetary policy can impact the Kiwi Dollar. Additionally, efforts by Chinese authorities to stabilize the stock market may provide additional support to New Zealand.
On the economic front, Statistics New Zealand reported that the nation’s Trade Balance NZD (YoY) for December showed improvement at $-13.57B, slightly better than the previous reading of $-13.90B. Exports decreased to $5.94B in December, compared to $5.99B previously, while imports declined to $6.26B from $7.20B in November.
Investors are considering the likelihood of the Federal Reserve (Fed) implementing policy easing as US inflation indicates a slowdown. The CME FedWatch Tool indicates that futures traders have priced in a 53% probability of the Fed cutting interest rates for the first time in this cycle during the March meeting.
Traders are expected to closely monitor essential economic indicators, particularly Tuesday’s releases of the US Housing Price Index and Consumer Confidence figures. This scrutiny is anticipated to intensify following the forthcoming Federal Open Market Committee (FOMC) statement on Wednesday, providing additional insights into the market and influencing the NZD/USD pair’s trajectory.
