NZD/USD jumps to near 0.6000 as risk sentiment improves with US elections underway

• NZD/USD moves higher to near 0.6000 amid upbeat market sentiment.
• Traders see a tight competition between Kamala Harris and Donald Trump for the US presidential elections.
• Investors expect the RBNZ to reduce its interest rates again by 50 bps on November 27.

The NZD/USD pair climbs to near the psychological resistance of 0.6000 in European trading hours on Tuesday. The Kiwi asset strengthens as the market sentiment turns cheerful with the United States (US) presidential elections taking center stage.

Traders remain uncertain over the likely outcome, with the latest polls showing a neck-to-neck competition between former President Donald Trump and their Democratic rival Kamala Harris.

The S&P 500 opens on a positive note, exhibiting decent demand for risk-sensitive assets. The US Dollar Index (DXY), which gauges Greenback's value against six major currencies, falls slightly to near 103.70.

Trump's victory will be unfavorable for an economy like New Zealand, which is one of the leading trading partners of China. Trump vowed to levy a 60% import tariff on China if he wins, which will escalate risks to economic growth.

Though risk-on market mood has assisted a recovery in the kiwi dollar, its overall appeal remains weak as investors expect the Reserve Bank of New Zealand (RBNZ) to cut its interest rates again by 50 basis points (bps) in its last monetary policy meeting of this year on November 27.

The NZ economy is in dire need of economic stimulus to diminish fears of a further slowdown in the economy and revive labor demand. For fresh cues about current employment status, investors await Q3 Employment data, which will be published on Wednesday. The labor market report is expected to show that the Unemployment Rate rose to 5% from 4.6% in the previous quarter.