• NZD/USD struggles to extend the corrective bounce off six-week low.
• Sluggish sentiment, mixed headlines and US holiday challenge Kiwi pair buyers.
• RBNZ Shadow Board expects 0.50% rate hike but NZ FinMin cites inflation as the key catalysts.
• Fed hawks need confirmation from FOMC Minutes, second-tier data.

NZD/USD seesaws around 0.6240 as it struggles to push back the bearish bias after a four-day losing streak, keeping the bounce off six-week low during early Monday morning in Europe. In doing so, the Kiwi pair portrays the traders’ cautious mood ahead of the key Reserve Bank of New Zealand (RBNZ) monetary policy meeting and Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting.

Earlier in Asia, the RBNZ's Shadow Board recommended 50 basis points (bps) of an increasing in the benchmark cash rate by citing strong inflationary pressures. On the same line could be the latest comments from New Zealand (NZ) Deputy Prime Minister and Finance Minister (FinMin) Grant Robertson who said that the RBNZ has a responsibility to address inflation while also adding, “RBNZ needs to look through current events.”

It’s worth noting that the flood in New Zealand joins recently downside economic indicators for the Pacific nation to probe the RBNZ hawks.

Also challenging the NZD/USD bulls are the geopolitical fears emanating from the US-China tussles, recently about Taiwan trade deal with the Washington and Beijing’s ties with Russia.

On a different page, upbeat US data and mixed comments from the Federal Reserve (Fed) officials seemed to have triggered the NZD/USD pair’s corrective bounce off the multi-day low. Also allowing the Kiwi pair traders to push back the bears is the US holiday.

Looking forward, natural calamities and the recent weakness in the Auckland’s data may probe the RBNZ hawks. However, this week’s 0.50% rate hike is almost given and may not impress the NZD/USD bulls unless offering hints for further strong rate increases.

Following the RBNZ meeting, the Fed Minutes will also be crucial for clear directions as the US central bank officials have recently praised the upbeat data surrounding inflation, Retail Sales and jobs.