NZD/USD continues to gain ground for the second consecutive day, hovering around 0.5930 during the early European session on Thursday. The decline in the US Dollar (USD) contributes support for the NZD/USD pair, which could be attributed to the improved risk sentiment.
On Wednesday, the report indicated that New Zealand's Consumer Price Index (CPI) has hit a nearly 3-year low, registering at 4% year-over-year in the first quarter. This situation provides the Reserve Bank of New Zealand (RBNZ) with more flexibility to contemplate interest rate cuts. Despite acknowledging persistent inflation in specific sectors, the RBNZ opted to maintain interest rates at 5.5% during its policy meeting last week.
On the other side, Federal Reserve Bank of Cleveland President Loretta Mester acknowledged on Wednesday that inflation has exceeded expectations. Mester stressed that the Fed requires further assurance before confirming the sustainability of 2% inflation, as per a Reuters report.
In addition, US Federal Reserve (Fed) Chair Jerome Powell commented on Tuesday that recent data indicates limited progress in inflation this year, suggesting an extended period before reaching the 2% target. This statement potentially signals a hawkish sentiment surrounding the Fed’s upcoming policy decision, which could provide support for the US Dollar, consequently, limiting the advance of the NZD/USD pair
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