NZD/USD softens below 0.6000 amid expectation of slower pace of Fed rate cuts

• NZD/USD weakens to near 0.5970 in Monday's early Asian session. 
• Expectation of a slower pace of Fed rate reductions boosts the US Dollar. 
• Fresh stimulus policies from China might help limit the NZD's losses. 

The NZD/USD pair trades with mild losses around 0.5970 on Monday during the Asian trading hours. The firmer Greenback amid stronger US economic data and the less dovish stance of the US Federal Reserve (Fed) undermine the pair. 
 
Meanwhile, the USD Index (DXY), which tracks the US Dollar (USD) against a basket of currencies, currently trades near a three-month top of 104.50. US rate futures have priced in a 97.7% possibility that the Fed will cut rates by 25 basis points (bps) in November, according to the CME FedWatch tool. 

Data released by the US Census Bureau on Friday showed that Durable Goods Orders in the US declined by 0.8% in September, beating the estimation of a 1.0% decrease. Durable Goods Orders excluding transportation increased 0.4% in September. Finally, the University of Michigan's Consumer Sentiment Index rose to 70.5 in October, the highest in six months, better than the previous reading and the consensus.  

The Reserve Bank of New Zealand (RBNZ) lowered its Official Cash Rate (OCR) in August and cut another OCR in October. The RBNZ is expected to deliver another 50 basis points (bps) reductions at its final monetary policy of the year on November 27, with markets pricing some risk of a 75-point move. This, in turn, weighs on the Kiwi against the USD. 

The RBNZ  Governor Adrian Orr said last week that the central bank can take a more measured and "circumspect" approach to easing after hiking rates aggressively to tame inflation. 

Traders will keep an eye on the additional fresh stimulus measures from Chinese officials to boost the economy. On Monday, China's Vice Minister of Finance Liao Min stated that China will step up countercyclical adjustments of its macro policies to bolster economic recovery in the fourth quarter, which will lay a solid foundation for achieving the annual growth target of around 5% this year. Any positive developments from fresh plans could lift the New Zealand Dollar (NZD), as China is a major trading partner to New Zealand.