NZD/USD ticks up to near 0.5960 as Fed dovish bets weigh on US Dollar

• NZD/USD gains marginally to near 0.5960 as the US Dollar faces selling pressure due to Fed dovish bets.
• The Fed is certain to cut interest rates in its policy meeting on Wednesday.
• According to Reuters, the RBNZ will cut interest rates two times more in the remainder of the year.

The NZD/USD pair edges higher to near 0.5960 during the late European trading session on Monday. The Kiwi pair gains marginally as the US Dollar (USD) faces selling pressure amid firm expectations that the Federal Reserve (Fed) will cut interest rates in the monetary policy meeting on Wednesday.

During the press time, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades 0.2% lower to near 97.40.

According to the CME Fedwatch tool, traders have fully priced in that the Fed will cut interest rates on Wednesday.

Fed dovish expectations have been prompted by growing United States (US) labor market concerns. Last week, Initial Jobless Claims data for the week ending September 5 showed that individuals claiming jobless benefits came in highest in four years at 263K.

As the Fed is widely anticipated to cut interest rates on Wednesday, investors will pay close attention to cues regarding the monetary policy outlook for the remainder of the year.

Meanwhile, the outlook of the New Zealand Dollar (NZD) remains uncertain as the Reserve Bank of New Zealand (RBNZ) is loosen its monetary policy further. According to a report from Reuters, the RBNZ will reduce its Official Cash Rate (OCR) two times in the remainder of the year. The RBNZ has already reduced its OCR 125 basis points to 3% this year.