NZD/USD gathers strength above 0.6000, Fed rate decision in focus

• NZD/USD edges higher to near 0.6025 in Wednesday's early Asian session. 
• Reduced RBNZ rate cut bets support the New Zealand Dollar.
• The Fed is expected to keep interest rates steady at its June meeting on Wednesday.

The NZD/USD pair gathers strength to around 0.6025 during the early Asian session on Wednesday. The New Zealand Dollar (NZD) edges higher against the Greenback amid reduced rate cut expectations from the Reserve Bank of New Zealand (RBNZ). Later on Wednesday, the US Federal Reserve (Fed) interest rate decision will be in the spotlight. 

Hotter inflation in New Zealand has fueled the case for the RBNZ to keep interest rates at 3.25% in July, which provides some support to the Kiwi. "May month selected price indexes are unequivocally hawkish. On balance, the monthly data has turned out to be more inflationary than we had expected," said BNZ head of research Stephen Toplis. 

The weaker-than-expected US economic data released on Tuesday weighs on the US Dollar (USD) and acts as a tailwind for the pair. US Retail Sales declined by 0.9% in May, compared to the 0.1% decrease (revised from +0.1%) recorded in April, according to the US Census Bureau. This reading came in below the market consensus of -0.7%.

On the other hand, the rising geopolitical tensions in the Middle East could boost the safe-haven currency like the USD. US President Donald Trump posted on his social media platform late Tuesday, calling for Iran's "unconditional surrender." Investors are concerned that the United States will participate in the Israel-Iran conflict. 

All eyes will be on the Fed rate decision and press conference later on Wednesday. The US central bank is anticipated to leave the interest rate unchanged at the June meeting. Traders now see a nearly 80% possibility of a Fed rate cut in September, followed by another one in October, according to Reuters.