Anna 
During the early European session on Monday, the NZD/USD pair has posted modest gains, hovering below the 0.6000 barrier. This slight uptick is supported by the weakening of the US Dollar Index (DXY), which has dipped below the mid-104.00s. With no significant economic data releases from New Zealand, the price dynamics of the USD will remain the primary driver for the NZD/USD pair. Currently, the pair is trading near 0.5995, marking a 0.04% gain for the day.
Last week, the Federal Reserve (Fed) opted to keep the benchmark rate within the 5.25%-5.5% range at its March meeting. Fed Chairman Jerome Powell reiterated the possibility of interest rate cuts later this year, emphasizing the need for greater confidence that inflation is moving towards the 2% target. These dovish remarks from Fed officials could potentially weigh on the US Dollar (USD) and provide support to the NZD/USD pair in the short term.
Although the Fed maintained its outlook for the median dot plot for 2024, hinting at three quarter-point rate cuts this year, Fed Bank of Atlanta President Raphael Bostic expressed a more conservative view. Bostic stated on Friday that he anticipates only one interest rate cut this year, adjusting his previous forecast of two cuts due to persistent inflation and stronger-than-anticipated economic data.
On the New Zealand front, the International Monetary Fund (IMF) highlighted in a report that the Reserve Bank of New Zealand is expected to have room to initiate interest rate cuts later this year as inflation returns to its target band. The IMF projected that inflation in New Zealand will likely return to the central bank’s 1-3% target in the third quarter of this year.
Looking ahead, traders will focus on key events such as the Chicago Fed National Activity Index, US New Home Sales for February, and Fed’s Bostic speech scheduled for Monday. On Tuesday, attention will shift to the release of Durable Goods Orders, with anticipation building for the US Gross Domestic Product Annualized data on Thursday, expected to show a growth rate of 3.2% in Q4. These upcoming events will guide traders in identifying potential trading opportunities surrounding the NZD/USD pair.
