NZD/USD moves above 0.6000 due to little change in US economic activity

• The NZD/USD has appreciated as the Fed's Beige Book indicated minimal changes in economic activity across nearly all districts.
• The US Dollar Index trades just below its recent high of 104.57, marking its strongest point since late July.
• The New Zealand Dollar may struggle due to the rising likelihood of another rate cut in November by the RBNZ.

NZD/USD gains ground as the US Dollar (USD) faced downward pressure following the release of the Federal Reserve’s (Fed) Beige Book on Wednesday. The latest report indicated that economic activity was "little changed in nearly all Districts," in contrast to August's report, where three Districts reported growth and nine showed flat activity. The pair trades around 0.6010 during the Asian session on Thursday.

The US Dollar weakened slightly, driven by a modest dip in US Treasury yields. 2-year and 10-year yields on US Treasury bonds stand at 4.07% and 4.23%, respectively, at the time of writing. However, The US Dollar Index (DXY), which tracks the US Dollar’s (USD) value against six major currencies, surged to its highest level since late July, reaching 104.57 on Wednesday.

Signs of economic resilience and rising inflation concerns have lessened the chances of a significant rate cut by the Federal Reserve in November. According to the CME FedWatch Tool, there is an 88.9% probability of a 25-basis-point rate cut, with no expectation of a larger 50-basis-point cut.

Traders are likely to keep an eye on the S&P Global Purchasing Managers Index (PMI), a leading indicator gauging US private-business activity in the manufacturing and services sector, which is set to be released on Thursday.

However, the upside of the New Zealand Dollar (NZD) could be limited due to rising odds of another rate cut in November by the Reserve Bank of New Zealand (RBNZ), with inflation easing and economic output remaining sluggish.