Rising expectations of a December Fed rate hike lift the USD, pressuring the NZD as traders await US PMI data.
The NZD/USD pair fell to 0.5705, marking its fifth straight day of declines during Asian trading on Tuesday. The USD gained strength amid growing speculation that the Federal Reserve may adopt a more aggressive stance on inflation under new leadership, with Fed funds futures pricing an 89% chance of a December hike, up from 15.2% a week ago.
Traders are closely watching preliminary US S&P Global PMI readings due later Tuesday, which could further influence Fed policy expectations. Meanwhile, geopolitical developments, including progress in US-Iran negotiations, have had limited impact on the pair’s downward momentum.
The Kiwi’s decline reflects broader USD resilience, driven by shifting monetary policy bets and economic data anticipation.