The NZD/USD pair is trading steadily around 0.5860 during Thursday’s early Asian session. Market sentiment remains cautious as concerns grow over the US Federal Reserve’s (Fed) independence following President Donald Trump’s decision to remove Fed Governor Lisa Cook on allegations of mortgage-related misconduct.
Investors are closely watching the political developments, with Trump indicating on Tuesday that he expects to soon hold a majority of his own appointees on the Fed’s board, supporting his push for rate cuts. In contrast, New York Fed President John Williams highlighted the need to protect central bank independence, a factor that could put pressure on the US Dollar (USD) against the New Zealand Dollar (NZD) in the near term.
Meanwhile, upside momentum for the Kiwi remains capped after the Reserve Bank of New Zealand (RBNZ) cut its benchmark rate last week and signaled the possibility of further easing amid rising domestic and global growth risks. RBNZ Governor Christian Hawkesby reiterated that policy decisions will remain data-driven, but added that persistent caution among businesses and consumers may warrant additional support.
Looking ahead, traders await the release of the second estimate of US Q2 GDP later on Thursday, expected to show growth of 3.1% annually. Additionally, weekly Initial Jobless Claims and Pending Home Sales figures will also be published, offering further insight into the US economic outlook.
