NZD/USD extends winning streak, nearing fresh year-to-date highs

• NZD/USD trades near 0.6071, posting a fifth consecutive day of gains and eyeing year-to-date highs.
• Trump's criticism of Powell, soft US Q1 GDP data, and the Iran-Israel de-escalation weigh on the US Dollar.
• ANZ Consumer Confidence jumps 5.9 points to 98.8 in June.

The New Zealand Dollar (NZD) extends its winning streak against the US Dollar (USD) for the fifth straight session on Friday, buoyed by broad-based Greenback weakness. The NZD/USD pair is staging a solid recovery from a six-week low, edging higher to trade around 0.6071, just shy of year-to-date highs.

The US Dollar remains under pressure following fresh criticism of Federal Reserve (Fed) Chair Jerome Powell by US President Donald Trump, which has raised concerns over central bank independence. Meanwhile, easing geopolitical tensions between Iran and Israel are supporting risk appetite, further weighing on the safe-haven US Dollar.

The US Dollar Index (DXY) remains pinned near a three-year low, hovering around 97.10.

Data released earlier on Friday showed that the ANZ-Roy Morgan Consumer Confidence Index jumped 5.9 points to 98.8 in June -- its highest level in six months -- from 92.9 previously. All subcomponents improved, with a notable rise in the number of households saying it is a good time to buy major household items.

The Reserve Bank of New Zealand (RBNZ) lowered the Official Cash Rate (OCR) to 3.25% in May, marking its sixth consecutive rate cut and aligning with market expectations.

Since initiating the easing cycle in August 2024, the central bank has slashed rates from a peak of 5.5%. However, signs suggest the cycle may be nearing an end.

RBNZ Governor Christian Hawkesby recently noted that "a further cut in the OCR is not a done deal" at the upcoming July 9 meeting, emphasizing a more cautious, data-dependent approach, according to a report BHH Marketview.

The swaps market now prices in just a 20% chance of a July cut and implies 36 basis points of additional easing over the next year, with the policy rate projected to trough between 2.75% and 3.00%.

On the US side, expectations for Fed interest rate cuts are rising amid growing political noise. President Donald Trump is reportedly considering announcing his preferred candidate for Fed Chair as early as September or October, according to the Wall Street Journal.

Speculation is mounting that Trump could attempt to steer monetary policy through a "shadow chair" -- an unofficial figure tasked with influencing the Fed's direction ahead of Jerome Powell's term ending in May 2026. Markets reacted swiftly, with traders increasing their bets on rate cuts. CME Group's FedWatch Tool now shows a 60% probability of three cuts in 2025, up sharply from expectations for just two earlier this week.

Fresh data added to the dovish case. The core Personal Consumption Expenditures (PCE) Price Index -- the Fed's preferred inflation gauge -- rose 0.2% MoM in May, above the 0.1% forecast. On a YoY basis, the index climbed to 2.7%, up from April's 2.6%, and slightly above market forecasts of 2.6%, suggesting underlying price pressures remain steady.