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The New Zealand Dollar (NZD) is losing ground against the US Dollar (USD) on Tuesday, slipping back after a failed attempt to break above the key 0.6000 level.

The pullback comes as concerns over US and EU trade tensions ease and the broader market mood becomes more stable, allowing the US Dollar to recover some of last week’s losses.

At the time of writing, the NZD/USD pair is trading near 0.5945after encountering resistance at the psychologically significant 0.6000 mark and failing to build momentum beyond it. 

With US markets back from the Memorial Day break, the USD is finding fresh support. A stronger-than-expected Consumer Confidence reading has helped fuel the rebound. The index rose sharply to 98 in May, up from 85.7 in April, reflecting a notable increase in optimism among US consumers. 

The data highlights growing confidence in the economic outlook despite lingering global uncertainties.

That rejection has prompted a pullback toward the midpoint of the decline from September to April.

NZD/USD retreats with RBNZ rate decision, FOMC minutes ahead

For the Kiwi, Wednesday’s economic agenda remains a key focal point for investors as markets prepare for the Reserve Bank of New Zealand’s (RBNZ) interest rate decision, scheduled for 02:00 GMT.

Market participants are anticipating that the central bank will announce a 25 bps (0.25%) rate cut. The move would lower the benchmark rate to 3.25%, down from its current level of 3.50%.

Although the reduction has been priced into the NZD/USD exchange rate, the accompanying Monetary Policy Statement may help induce volatility. 

With the report providing insight into the reasoning for the latest announcement and the projected economic outlook, any hawkish or dovish comments may result in a repricing of expectations for the trajectory of interest rates.

For the United States, the Federal Open Market Committee (FOMC) will release the Minutes of its May 6-7 meeting, when policymakers decided to keep the interest rate unchanged. The Minutes are expected to reveal clues on the Fed’s hawkish stance and could further help guide expectations for the timing of the next rate cut, currently priced in for September. 

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