NZD/USD Rises Above 0.6000 as RBNZ Holds Firm and Fed Decision Looms

NZD/USD Edges Higher Toward 0.6025 on Hawkish RBNZ Outlook

The New Zealand Dollar (NZD) advanced on Wednesday, pushing NZD/USD to 0.6025 during the early Asian session. The pair is supported by waning expectations of a near-term rate cut by the Reserve Bank of New Zealand (RBNZ) and broad US Dollar (USD) weakness ahead of a key Federal Reserve (Fed) interest rate decision.

RBNZ Rate Cut Bets Fade After Inflation Surprise

New Zealand’s May inflation data came in hotter than expected, reducing the likelihood of a July rate cut by the RBNZ, which currently maintains the benchmark rate at 3.25%.

BNZ Head of Research, Stephen Toplis, noted that the “May month selected price lists are unequivocally hawkish,” suggesting that inflationary pressures are not subsiding as quickly as hoped. This hawkish tone supports the Kiwi, pushing NZD/USD higher.

Fed Decision in Focus as US Retail Sales Disappoint

On the US side, Retail Sales for May fell by 0.9%, marking a sharp contrast from the revised 0.1% decline in April. The drop was worse than the market forecast of -0.7%, casting doubt on the strength of US consumer spending.

Despite weak data, analysts expect the Federal Reserve to keep rates on hold during its June meeting later today. However, commentary from Fed Chair Jerome Powell will be key to shaping rate expectations for the second half of 2025.

NZD/USD Outlook: Fed Guidance Key for Next Move

With US economic softness and stronger-than-expected inflation in New Zealand, NZD/USD may remain supported in the short term. Traders will be watching the Fed’s tone closely—a dovish signal could push the pair further above 0.6050, while hawkish remarks could limit upside momentum.

Suggested Internal Links (Tredu.com):

• NZD/USD Technical and Fundamental Forecast
• Understanding RBNZ Policy Decisions
• US Retail Sales: Why They Matter for Forex Traders
• Live Coverage: Federal Reserve Interest Rate Decision