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NZD/USD steadies near 0.5660 as hawkish Fed tone lifts USD
CME FedWatch shows a 70%+ probability of an October Fed rate hike, up from 57.6% last week.
NZD/USD paused its three-day slide and was trading around 0.5660 during European hours on Monday, according to FXStreet.
The pair still faces potential downside, as traders leaned into a stronger US Dollar tied to hawkish comments from Federal Reserve officials, with attention also focused on upcoming US employment data and the Fed’s preferred inflation measures.
FXStreet also pointed to FedWatch expectations shifting higher, with the CME FedWatch Tool indicating a more than 70% probability of an October rate hike, up from 57.6% last week and 17.7% a month ago.
Geopolitical risk remained in focus as well, with FXStreet noting that US President Donald Trump rejected Iran’s proposal to reopen the Strait of Hormuz and that negotiations are set to resume this week.