• NZD/USD is trading with a bearish bias near 0.5890 in Tuesday’s early Asian session.
• Markets have slowed down their expectations for future interest rate cuts by the US Fed.
• ANZ analysts are forecasting a 50 basis point cut in RBNZ interest rates at its November meeting next week.

The NZD/USD pair is trading with slight losses around 0.5890 during Tuesday’s Asian session. The pair is losing value as a result of dollar consolidation. On Tuesday, investors will pay attention to building permits issued in October and the start of house construction in the USA.

The US Dollar Index (DXY), which measures the US dollar against a basket of currencies, is back from a yearly high above 107.00 to almost 106.20. However, the dollar’s downsides may be circumscribed as investors expect the incoming Trump administration to focus on cutting taxes and raising tariffs, which could trigger inflation and ponderous the path of interest rate cuts by the Federal Reserve (Fed).

Boston Fed President Susan Collins said on Friday that interest rate cuts may be paused at the December meeting, but this will depend on upcoming employment and inflation data. According to the CME FedWatch Tool, markets have priced in almost 58.7% of the Fed’s 25 basis point (bps) rate cut at its December meeting.

For Kiwis, rising expectations of massive interest rate cuts by the Reserve Bank of New Zealand (RBNZ) next week are weighing on the New Zealand dollar (NZD). ANZ analysts are forecasting a 50 basis point (bp) RBNZ cut on November 27. “We expect a cut of 50 basis points to 4.25% next week. This would be consistent with the October RBNZ announcements, economist forecasts and market prices. “The data since the October monetary policy review has been mixed, but no data appears likely to disrupt the apple cart,” ANZ analysts noted.