Ella 
NZD/USD fell for the third consecutive day on Monday after attracting fresh sellers after rising to the 0.6025-0.6030 area during the Asian session. This was also the fifth lower session in the previous six trading days and dragged the spot price to the lowest level since May 14 in the past hour. Now bears are waiting for a break below the 0.6000 psychological mark before betting on further declines.
The New Zealand dollar continued to show weakness as the market bet that the Reserve Bank of New Zealand (RBNZ) will soon cut interest rates after the weak CPI report released last week. In addition to this, concerns about the slowdown in China, the world’s second largest economy, also weakened the demand for commodity currencies including the New Zealand dollar, causing the New Zealand dollar to fall against the US dollar.
On the other hand, the US dollar (USD) found fresh demand on Monday, which was a reaction to the US political developments over the weekend and the dovish expectations of the Federal Reserve (Fed). In fact, US President Joe Biden’s withdrawal from the presidential race on Sunday prompted investors to close some trades betting on Trump’s victory. Moreover, the market is pricing in a 100% probability of a rate cut by the Federal Reserve in September.
Moreover, investors expect the U.S. central bank to cut borrowing costs two more times before the end of the year. This in turn has kept the dollar bulls on the defensive and helped limit the downside for NZD/USD. In the absence of any relevant market-moving economic data released by the U.S., the mixed fundamental backdrop makes it prudent to wait for some follow-through selling before initiating fresh bearish bets on the pair.
