The NZD/USD currency pair extends its upward momentum for a third consecutive day, reaching its highest level since August 11, around 0.6060 during the Asian session. The persistent weakness in the US dollar stems from the belief that the Federal Reserve has concluded its tightening policy, with markets now pricing in potential rate cuts as early as March 2024. This outlook continues to pressure the US dollar to a near three-month low, supporting the NZD/USD pair.

Optimism surrounding additional stimulus measures from China further weakens the safe-haven USD and benefits commodity-linked currencies like the New Zealand Dollar (NZD). Chinese officials express commitment to providing more policy support for the struggling real estate sector. The People’s Bank of China (PBoC) maintains its benchmark Loan Prime Rate (LPR) near record lows and injects around 80 billion Yuan into the economy.

Despite these positive factors, the NZD/USD struggles to breach the 0.6050-0.6055 supply zone, as traders are cautious about releasing FOMC meeting minutes during the US session. The uncertainty about the Fed’s rate-cut timing prompts investors to wait on the sidelines. The minutes will offer insights into policymakers’ views on potential rate hikes, influencing near-term USD dynamics and providing direction to the NZD/USD pair.

As traders await the FOMC minutes, the US economic docket featuring Existing Home Sales data will be closely watched during the early North American session for short-term opportunities.

Trade Idea:

Consider cautious long positions on NZD/USD, monitoring the 0.6050 resistance and FOMC minutes for potential market shifts.