NZD/USD falls toward 0.6200 after pulling back from seven-week highs

• NZD/USD retreats from a seven-week high of 0.6236, reached on Friday.
• The downside of the pair could be restrained due to the rising odds of a Fed rate cut in September.
• Fed Chair Powell stated at the Jackson Hole Symposium, "The time has come for policy to adjust.”

NZD/USD trades around 0.6210 after pulling back from a seven-month high of 0.6236, marked on Friday. However, the downside of the NZD/USD pair could be limited due to the dovish sentiment surrounding the US Federal Reserve (Fed) regarding its policy outlook.

Fed Chairman Jerome Powell stated at the Jackson Hole Symposium on Friday, "The time has come for policy to adjust." Although Powell did not specify when rate cuts would begin or their potential size, markets anticipate the US central bank will announce a 25-basis points rate cut at the September meeting.

Additionally, Philadelphia Fed President Patrick Harker stated on Friday that the US central bank's approach to interest rate adjustments needs to be "methodical," signaling that policymakers are planning a series of rate cuts throughout the remainder of 2024 as the US central bank prepares for a dovish shift, according to Bloomberg.

However, the New Zealand Dollar (NZD) could face downward pressure as markets have fully factored in additional 25 basis point cuts by the Reserve Bank of New Zealand (RBNZ) for October and November. The RBNZ has already begun its easing cycle, reducing its Official Cash Rate (OCR) to 5.25% in August.

Traders will likely watch the ANZ – Roy Morgan Consumer Confidence for August and the seasonally adjusted Building Permits (MoM) data for July later this week, as these figures could offer new insights into New Zealand's economic activity.