New Zealand Dollar gathers strength, RBNZ rate decision in spotlight

• The New Zealand Dollar gains traction in Monday’s early Asian session. 
• Diminishing odds of an RBNZ rate cut and hotter Chinese inflation data underpin the Kiwi.
• The RBNZ monetary policy meeting will take center stage on Wednesday. 

The New Zealand Dollar (NZD) attracts some buyers to near the 0.6000 psychological level on Monday. The Kiwi gains traction as markets trimmed bets on a rate cut by the Reserve Bank of New Zealand (RBNZ) at its August meeting on Wednesday after the stronger-than-expected employment report. Furthermore, the hotter Chinese July Consumer Price Index (CPI) supports the China-proxy NZD as China is New Zealand’s largest trading partner.

Nonetheless, the heightened volatility and elevated geopolitical risks in the Middle East might exert some selling pressure on riskier assets like the Kiwi and cap the pair’s upside. Traders await the RBNZ interest rate decision on Wednesday for fresh catalysts. On the US docket, the Producer Price Index (PPI), Consumer Price Index (CPI) and Retail Sales will be released on Tuesday, Wednesday and Thursday, respectively.