NZD/USD weakens below 0.6250 as traders await fresh drivers

• NZD/USD extends its rally around 0.6250 in Wednesday's early Asian session. 
• The firmer bets of Fed rate cuts continue to undermine the US dollar ahead of the key US data. 
• RBNZ is open to faster rate cuts, which might drag the Kiwi lower against the USD. 

The NZD/USD pair trades on a weaker note near 0.6245 after retracing from eight-month highs during the early Asian session on Wednesday. However, the downside of the pair is likely to be limited due to the weaker US Dollar (USD) after the Federal Reserve (Fed) signalled the upcoming rate cut this year. Fed's Christopher Waller and Raphael Bostic are scheduled to speak later on Wednesday. 

The prospect of upcoming US interest rate cuts might continue to exert some selling pressure on the Greenback. The rate futures markets have priced in nearly 34.5% odds that the Fed will cut rates by 50 basis points (bps) in September, with 100 bps Fed easing expected this year.

Data released by the Conference Board on Tuesday revealed that the US Consumer Confidence Index rose to 103.3 in August from an upwardly revised 101.9 in July. This figure improved to a six-month high amid optimism over the economic outlook. However, concerns about the labor market remain after the Unemployment Rate jumped to near a three-year high of 4.3% last month.

Investors are looking forward to fresh drivers from the US economic data this week. The preliminary estimate for the US Gross Domestic Product (GDP) for the second quarter (Q2) and the Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation gauge, will be published on Thursday and Friday, respectively.

After a surprise interest rate cut by the Reserve Bank of New Zealand (RBNZ) in its August meeting, there is speculation among monetary policy committee members to accelerate future cuts if economic data suggests increasing downside risks to activity and inflation. Traders expect the New Zealand central bank to cut rates by 25 bps in October and November. This, in turn, might weigh on the New Zealand Dollar (NZD) and cap the upside for the pair.