NZD/USD attracts some buyers above 0.5650 amid quiet session

• NZD/USD gains momentum to around 0.5655 in Monday's early European session. 
• RBNZ dovish bets might undermine the Kiwi, but fresh Chinese stimulus measures could help limit its losses.
• The Fed hinted it probably would cut rates twice more next year. 

The NZD/USD pair climbs to near 0.5655 during the early European session on Monday. Nonetheless, the expectations of more aggressive monetary easing by the Reserve Bank of New Zealand (RBNZ) might cap the upside for the Kiwi. The markets are likely to trade in a quiet session amid light post-holiday trading. 

The New Zealand Dollar (NZD) remains under strong bearish pressure due to the dovish bets from the RBNZ. Currently, markets are now pricing in a nearly 65% probability that the New Zealand central bank will lower the cash rate by 50 basis points (bps) to 4.25% at its February meeting.

However, the latest in a series of Chinese government measures aimed at increasing private consumption might boost the China-proxy Kiwi as China is a major trading partner for New Zealand. China's central government stated that it will offer handouts to people struggling with the cost of living and vowed more benefits for some unemployed people ahead of a key national holiday, Xinhua News Agency reported, citing a notice from the Ministry of Civil Affairs.

On the USD's front, the Federal Reserve (Fed) lowered the interest rates at its December meeting, as expected, but Fed Chair Jerome Powell said more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation. Additionally, the latest Summary of Economic Projections (SEP), or "dot plot", indicated the US central bank's intention to reduce the number of interest rate cuts next year from four to just two quarter-percent reductions. The prospects for the Fed's cautious stance are likely to support the Greenback and act as a headwind for NZD/USD.