Ella 
NZD/USD was trading around 0.5990 during the Asian session on Wednesday, marking a second straight day of losses. The decline may have been influenced by sentiment that the Federal Reserve (Fed) will maintain higher interest rates for an extended period of time. Additionally, hawkish comments from Minneapolis Fed President Neel Kashkari also strengthened the U.S. dollar, putting downward pressure on NZD/USD.
According to Reuters, comments by Minneapolis Fed President Neel Kashkari indicate that the market expects interest rates to remain unchanged for a considerable period of time. Although the possibility of an interest rate hike is low, it cannot be completely ruled out.
The U.S. Dollar Index (DXY), which measures the dollar’s performance against six major currencies, was higher near 105.50. Higher U.S. Treasury yields provided support to the dollar. As of press time, the yields on the 2-year and 10-year U.S. Treasury bonds were 4.84% and 4.47% respectively.
Last week, the Reserve Bank of New Zealand (RBNZ) signaled its intention to delay monetary easing until 2025, citing higher than expected inflationary pressures in the first quarter. This stance may provide support for the New Zealand dollar.
In addition, the New Zealand dollar market does not appear to be calm ahead of the release of key data from China, New Zealand’s main trading partner. This includes April trade balance data on Thursday and consumer price index reading on Saturday.
