New Zealand Dollar edges higher above 0.5850 as softer US inflation dampens Fed rate hike bets
The NZD/USD pair holds positive ground near 0.5855 during the early European session on Monday. The US Dollar (USD) weakens against the New Zealand Dollar (NZD) as softer US inflation data have led traders to cut bets on imminent rate hikes from the US Federal Reserve (Fed).
Data released last week showed that the US Consumer Price Index (CPI) inflation slowed in June, while the Producer Price Index (PPI) also arrived softer than expected. Markets continue to expect no change to rates at the Fed's next meeting on July 29, with Fed funds futures pricing an implied 85.6% chance of a hold, compared to a 61.5% odds a month ago, according to the CME FedWatch tool.
Cleveland Fed President Beth Hammack said on Friday that interest rates may need to rise to beat back persistent inflation. Meanwhile, Fed Governor Christopher Waller warned that policymakers need to see "several months" of sustained cooling before taking rate hikes off the table.
Earlier Monday, the People’s Bank of China (PBOC) kept its benchmark lending rates unchanged for a 14th consecutive month, as widely expected. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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