• NZD/USD sees more downside as soft NZ inflation has prompted RBNZ dovish bets.
• The US Dollar refreshes a two-month high as the Fed is expected to cut interest rates gradually.
• NZD/USD declines below the 200-day EMA.

The NZD/USD pair finds some buying interest after posting a fresh almost two-month low near 0.6040 on Wednesday. The near-term outlook of the Kiwi pair remains vulnerable as the New Zealand (NZ) Q3 Consumer Price Index (CPI) decelerated expectedly.

Annualized CPI rose by 2.2%, as expected, slower than 3.3% in the similar quarter of the previous year. Quarter-on-quarter inflation grew at a slower pace of 0.6% from the estimates of 0.7%, However, the pace was higher than 0.4% in the second quarter of the year.

Soft inflation data has prompted expectations that the Reserve Bank of New Zealand (RBNZ) could cut its Official Cash Rate (OCR) with a larger-than-usual size of 50 basis points (bps) for the second time in a row.

Meanwhile, the US Dollar (USD) posts a fresh two-month high as traders have priced out expectations that the Federal Reserve (Fed) would continue with a sizeable interest rate cut in November. According to the CME FedWatch tool, the Fed will cut its key borrowing rates by 25 bps in each of the two meetings remaining this year.

NZD/USD weakens after breaking below the horizontal support plotted from September 11 low of 0.6100 on a daily timeframe. The overall trend of the Kiwi pair has become bearish as it has formed a lower swing low. The asset is also trading below the 200-day Exponential Moving Average (EMA), which trades around 0.6100.