Ella 
NZD/USD was trading around 0.6130 during Monday’s Asian trading session as investors looked forward to the Reserve Bank of New Zealand’s (RBNZ) policy meeting on Wednesday. The Reserve Bank of New Zealand is expected to keep the official cash rate at 5.5% for the seventh consecutive meeting. Policymakers are likely to stress the importance of keeping policy restrictive for an extended period in order to get inflation back to the 1-3% target range.
Separately, on Monday, the New Zealand Institute of Economic Research (NZIER) Monetary Policy Shadow Committee recommended that the Reserve Bank of New Zealand keep the official cash rate unchanged in its upcoming monetary policy statement, citing ongoing concerns about persistently high inflation.
On the other hand, U.S. consumer inflation fell to 0.3% in April, fueling speculation that the Federal Reserve (Fed) may cut interest rates in 2024. However, the Fed remains cautious about inflation and the prospect of interest rate adjustments this year.
The odds of a 25 basis point rate cut by the Federal Reserve in September rose slightly to 49.0%, up from 48.6% a week ago, according to the CME FedWatch tool. The central bank is likely to ease monetary policy, which could weaken the US dollar and boost the NZD/USD exchange rate.
Federal Reserve Board of Governors member Michelle Bowman made waves on Friday when she said progress on inflation may not be as steady as expected. Bowman said the fall in inflation observed last year was temporary and there would be no further progress this year. In addition, Richmond Fed President Thomas Barkin noted that although inflation is slowing, it will take more time to achieve the Fed’s 2% goal.
