NZD/USD Holds Below 0.6000 on Dovish RBNZ Outlook, US GDP Data Awaited

The NZD/USD pair remains under pressure near 0.5970 during the Asian session on Wednesday, weighed down by the Reserve Bank of New Zealand’s (RBNZ) dovish outlook. Market participants are now looking ahead to key US data, including the third-quarter GDP report and ADP Employment Change for October, which are due on Wednesday.

Goldman Sachs analysts foresee a potentially aggressive stance from the RBNZ, forecasting rate cuts of 50 basis points in both November and February, with a possibility of a 75 bps cut in November. This dovish stance is expected to weaken the New Zealand Dollar (NZD) in the short term.
Adding to NZD sentiment, China is reportedly considering issuing an additional 10 trillion yuan (approximately $1.4 trillion) in debt to support its slowing economy. This potential stimulus could benefit the China-proxy Kiwi, as China is a significant trading partner for New Zealand.

Meanwhile, the expectation of a less aggressive rate path from the US Federal Reserve supports the US Dollar. Markets have nearly priced in a 98.4% probability of a 25 bps rate cut by the Fed in November. However, recent US economic data presents a mixed picture; the September JOLTS report showed job openings at their lowest level in over three years, while the Conference Board’s Consumer Confidence Index for October reached a nine-month high, reflecting optimism in the labor market.

With US Q3 GDP and Nonfarm Payrolls (NFP) data in focus, traders will monitor these releases for further insights into the US economic trajectory and potential impacts on the NZD/USD pair.