• NZD/USD loses ground due to risk aversion ahead of the Fed Chair Powell’s speech scheduled on Friday.
• The recent FOMC Minutes suggested that most Fed officials agreed on a rate cut in September.
• The New Zealand Dollar declines as Retail Sales is expected to fall by 1.0% QoQ for Q2.

NZD/USD breaks its four-day winning streak, trading around 0.6150 during the Asian session on Thursday. This downside of the NZD/USD pair could be attributed to the improved US Dollar (USD) amid higher Treasury yields.

Traders adopt caution ahead of the Federal Reserve (Fed) Chair Jerome Powell’s keynote speech at the Jackson Hole Annual Symposium on Friday. Powell may deliver a statement about the possibility of interest rate cuts in the United States (US) is highly anticipated.

However, the upside of the US Dollar could be limited as the Federal Reserve is anticipated to deliver 100 basis points (bps) in rate cuts by the end of this year. However, there is division among market analysts on whether the Fed will implement a 25 or 50 bps cut at its September meeting.

CME FedWatch Tool suggests that the markets are now pricing in a nearly 65.5% odds of a 25 basis point (bps) Fed rate cut in its September meeting, down from 71.0% a day ago. The probability of a 50 basis point rate cut increased to 34.5% from 29.0% a day earlier.