NZD/USD Rises on Softening Hawkish Expectations

The New Zealand Dollar (NZD) has been rising against the US Dollar (USD), with the NZD/USD pair trading around 0.5900 during Asian hours on Friday.

This appreciation is largely due to softening hawkish expectations surrounding the Federal Reserve's (Fed) monetary policy path, following recent comments from Fed Governor Christopher Waller and Chairman Kevin Warsh.

Fed Governor Waller signaled a preference for holding interest rates steady at the upcoming September meeting, assuming upcoming inflation figures offer no major shocks. This dovish tone contrasts sharply with Chairman Warsh's hawkish remarks delivered a week earlier.

The market pricing has shifted noticeably, with the CME FedWatch tool showing the probability of a September rate hike falling to 50.4%, down from 63.2% the previous day.