The NZD/USD Pair Finds Support above the 0.6100 Level and Awaits US PMI Data
Near 0.6115, the NZD/USD pair trades in negative territory for the second day in a row. As anticipated, the FOMC maintained the target range for the Federal Funds Rate at 5.25–5.50%. The RBNZ is expected to reduce OCR sooner rather than later, as three reductions are already factored in by the markets this year. Traders will closely monitor Thursday's release of the ISM Manufacturing PMI and US weekly Initial Jobless Claims.

On Thursday morning, the NZD/USD pair maintained its defensive stance above the 0.6100 level during the early Asian session. In January, the Federal Reserve (Fed) maintained interest rates at its meeting and left the door open to rate reductions. Jerome Powell, chairman of the Federal Reserve, stated, however, that the March rate cut is premature. Presently trading at approximately 0.6115, the pair has gained 0.03% on the day.
The US central bank maintained its benchmark interest rate in a range of 5.25%–5.50% on Wednesday, in response to the Fed's interest rate decision. The bank further stated that it will not initiate a reduction in the target range until it observes additional evidence of inflation progressing sustainably toward the 2% target. At the March meeting, investors had been anticipating a potential cycle of rate cuts, but Fed Chair Powell stated that this is probably not the case.
Conversely, the Reserve Bank of New Zealand (RBNZ) strives to sustain inflation at a level between 1% and 3%, with an emphasis on ensuring that forthcoming inflation hovers around the 2% threshold. Financial markets anticipate an earlier rather than later reduction in the Official Cash Rate (OCR) due to the decline in inflation; three reductions are already factored in for this year.
Thursday will also see the release of the January Chinese Caixin Manufacturing PMI, the US weekly Initial Jobless Claims, and the ISM Manufacturing PMI. On Friday, focus will transition to employment data from the United States, including January average hourly wages, nonfarm payrolls, and the unemployment rate.
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