NZD/USD pulls back to levels near 0.5800 with the RBNZ decision eyed

• The New Zealand Dollar approaches 0.5800 after rejection at 0.5845.
• Investors are split on whether the RBNZ will cut rates by 25 or 50 bps on Wednesday.
• The US Dollar is outperforming its peers, favoured by political and fiscal woes in France and Japan.
  

The New Zealand Dollar's rally met sellers at the 0.5845 area on Monday, and the pair is trading lower on Tuesday. The Kiwi has retraced the previous day's gains and approaches the 0.5800 line as investors turn their focus to the RBNZ's monetary policy decision, due on Wednesday.

The Reserve Bank of New Zealand is widely expected to lower borrowing costs further on Wednesday, but the market is split on whether it will be by 25 or 50 basis points

Weak New Zealand data feed hopes of a jumbo cut on Wednesday

The bank had been laying the ground for further monetary easing after its September meeting. Still, pressure for a jumbo (50 bps) rate cut in October has grown following the 0.9% GDP contraction in the second quarter. The New Zealand Dollar is struggling in this context.

The US Dollar, on the other hand, is firming up this week, unfazed by the US government shutdown or market expectations that the Fed will cut rates in late October, and is likely to do so again in December.

Growing concerns about France's public finances after the departure of the Prime Minister Sebastial Lecornu are hurting the Euro. In Japan, hopes that the new leader of the LDP party might hamper the BoJ's tightening plans have sent the Yen tumbling, providing a further impulse for the Greenback.