US rate cut

The New Zealand Dollar (NZD) continues to weaken against the US Dollar (USD), trading around 0.6230, as recent US PCE Index data lowers expectations for an aggressive Federal Reserve rate cut. The CME FedWatch Tool indicates a 70% chance for at least a 25 basis point cut in September, while the markets anticipate a 25 basis points cut by the Reserve Bank of New Zealand in 2024. Simultaneously, the Indian Rupee (INR) has also experienced a slight decline, trading at 83.8775 to the USD, amidst expectations of critical US labor data releases that could influence future Federal Reserve rate decisions. Investors are pricing in a 30% probability of a 50 basis points cut and a 70% probability of a 25 basis points cut by the Fed, with Friday's non-farm payrolls report seen as pivotal. The dollar's stability and the performance of Asian currencies, including the INR, reflect market anticipation surrounding US economic indicators, which are critical for global financial stability. Overall, both the NZD and INR are under pressure due to the cautious approach of the Fed indicated by recent inflation data and upcoming labor market reports.