NZD/USD Maintains Rises Over a One-Week High and around the Mid-0.5900s with a Bullish Risk Tone

Amid modest US Dollar (USD) weakness, the NZD/USD pair attracts follow-through purchasing for the third consecutive day on Wednesday and soars to over a one-week high, around the mid-0.5900s, during the Asian session.

Tuesday's publication of weaker US PMI readings suggested that the economic recovery lost momentum at the start of the second quarter. Moreover, the mitigation of geopolitical tensions in the Middle East sustains an overall optimistic sentiment in the stock markets and weakens the safe-haven greenback; this is perceived as advantageous for the risk-averse New Zealander. However, optimistic expectations regarding the Federal Reserve (Fed) serve to restrict the USD's decline and maintain control over the NZD/USD pair.

Presently, market participants appear certain that the Federal Reserve will not initiate its rate-cutting cycle in June. Moreover, they have reduced their anticipations regarding the overall quantity of rate reductions in 2024 to below two, or approximately 40 basis points. Conversely, the optimistic perspective continues to bolster higher yields on US Treasury bonds and is expected to function as a tailwind for the US dollar. Consequently, this could impede traders from executing aggressive bullish wagers on the NZD/USD pair, thereby restricting the upside.

Presently, investors eagerly await the release of the United States Durable Goods Orders later in the North American trading session for some impetus. On Thursday and Friday, the advance US Q1 GDP and US Personal Consumption Expenditures (PCE) Price Index figures will continue to dominate the market. This will impact market anticipations regarding the Federal Reserve's forthcoming policy choices, thereby stimulating demand for the USD and contributing to the determination of the NZD/USD pair's near-term trajectory.