NZD/USD gathers strength above 0.6050 amid concerns over Fed independence

• NZD/USD attracts some buyers to around 0.6065 in Friday’s early Asian session.

• Trump is considering naming the successor sooner than expected.

• The upbeat New Zealand’s economic data reinforced the RBNZ to stand pat in July.

The NZD/USD pair gains ground for the fourth consecutive day near 0.6065 during the early Asian session on Friday. The uptick of the pair is bolstered by a weakening Greenback amid renewed concerns over the US Federal Reserve’s (Fed) independence. The US May Personal Consumption Expenditures (PCE) - Price Index data will take center stage later on Friday.

US President Donald Trump could undermine Fed Chair Jerome Powell’s authority by soon naming his pick to head the central bank next year. Trump said that he has a list of potential Powell successors down to “three or four people,” without naming the finalists. 

Chicago Fed President Austan Goolsbee said on Thursday that the political waves are not a factor in decision-making, nor would be the naming of a shadow chair, per CNBC. The renewed concerns about the future independence and credibility of the Fed could undermine the US Dollar (USD) and act as a tailwind for the cross in the near term.

New Zealand’s stronger-than-expected Q1 Gross Domestic Product (GDP) and better May Trade Surplus data reinforce the Reserve Bank of New Zealand’s (RBNZ) decision to push back further interest rate cuts. This, in turn, provides some support to the Kiwi. Traders expect the Reserve Bank of New Zealand (RBNZ) to deliver only one more rate cut in the current easing cycle, likely to be fully priced in by November. 

Nonetheless, the renewed escalating tensions in the Middle East or economic uncertainty triggered by Trump’s tariff policy could drag the riskier assets like the NZD lower against the USD.