NZD/USD gives up gains as US Dollar recovers some initial losses, Fed Powell’s speech eyed

• NZD/USD surrenders intraday gains as the US Dollar recovers some of its initial losses.
• Investors look for fresh cues on the Fed’s monetary policy outlook after soft US inflation and the US-China trade truce.
• US President Trump keeps criticising Fed Powell for not bringing interest rates down.

The NZD/USD pair gives back its intraday gains and ticks lower to near 0.5935 during North American trading hours on Wednesday. The Kiwi pair corrects as the US Dollar (USD) recoups some of its intraday losses. The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, recovers from the intraday low of 100.30 to near 100.70.

The US Dollar has underperformed earlier in the day due to softer-than-expected United States (US) Consumer Price Index (CPI) data for April. The US headline CPI rose moderately by 2.3%, the lowest level seen since February 2021.

Meanwhile, the next trigger for the US Dollar will be the speech from Federal Reserve (Fed) Chair Jerome Powell, which is scheduled for Thursday. Investors would like to know whether the Fed has turned dovish on the interest rate outlook in the wake of cooling inflationary pressures and the agreement between the US and China to reduce tariffs by 115% for 90 days.

On Tuesday, US President Donald Trump criticized Fed Powell again for not lowering interest rates despite the easing prices of a significant number of goods.

"No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done," Trump said in a post on Truth Social and added, "What is wrong with Too Late Powell? Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!”.

On the New Zealand Dollar (NZD) front, the currency is expected to be driven by market expectations for the Reserve Bank of New Zealand’s (RBNZ) interest rate decision in the monetary policy later this month. The RBNZ is expected to lower its Official Cash Rate (OCR) amid uncertainty over the domestic outlook.