Ella 
Despite weakness in the US dollar (USD) during early Asian trade on Wednesday, NZD/USD remains on the defensive around 0.6000. Later in the day, New Zealand will release the ANZ Business Confidence Index. Markets are likely to remain silent in light trading ahead of the Good Friday holiday.
The Fed decided to keep interest rates at a range of 5.25% to 5.5% at its March meeting last week. Federal Reserve Chairman Jerome Powell did not explicitly mention the timing of a rate cut, but suggested that the first rate cut will depend on inflation measures and other key economic data. Many Fed officials agreed to wait and watch for more inflation signals before cutting interest rates to ensure inflation falls back to the 2% target. Federal Reserve official Christopher Waller and Chicago Fed President Austin Goolsby are expected to cut interest rates three times this year. Dovish comments from Federal Reserve officials weighed on the dollar against other currencies.
In terms of the New Zealand dollar, the New Zealand economy experienced a technical recession in the last quarter of 2024, which left ample room for the Reserve Bank of New Zealand to cut the official cash rate (OCR) in advance. The Reserve Bank of New Zealand’s continued aggressive rate-cutting cycle may therefore weigh on the New Zealand dollar and be negative for the New Zealand dollar/US dollar pair.
