NZD/USD oscillates around 0.6200 as investors await FOMC minutes for further guidance

• NZD/USD is consolidating around 0.6200 as FOMC minutes have come under spotlight.
• S&P500 futures have extended losses in Europe, portraying strength in the risk-aversion theme.
• Thursday’s ADP Employment report is expected to show additions of 180K employees in June.

The NZD/USD pair is demonstrating topsy-turvy moves near the round-level resistance of 0.6200 in the London session. The Kiwi asset has turned sideways as investors are awaiting a key trigger for further guidance. A volatile action is anticipated in the Kiwi asset as the release of the Federal Open Market Committee (FOMC) minutes would provide guidance about the interest rate peak.

S&P500 futures have extended losses in Europe, portraying strength in the risk-aversion theme amid obscurity about July’s Federal Reserve (Fed) monetary policy. The US Dollar Index (DXY) is showing topsy-turvy moves around 103.00 ahead of FOMC minutes.

As per the CME Fedwatch tool, more than 86% chances are in favor of an interest rate hike by 25 basis points (bps) to 5.25-5.50%. Also, Fed chair Jerome Powell has cited the need for two more interest rate hikes to weigh pressure on stubborn core inflation.

The release of the FOMC minutes will provide guidance on interest rates and current economic prospects. Although further policy-tightening is warranted, the United States' economic prospects are facing immense pressure.

Later this week, US Employment data will be keenly watched. Thursday’s Automatic Data Processing (ADP) Employment data is expected to show additions of 180K employees in June lower than May’s addition of 278K.

On the New Zealand dollar front, weak Caixin Services PMI could bring near-term pressure in Kiwi. The economic data has sharply dropped to 53.9 from the former release of 57.1. Investors are worried that the Chinese economic recovery is faltering despite supportive monetary and fiscal policies.

It is worth noting that New Zealand is one of the leading trading partners of China and a decline in Caixin Services PMI might impact the New Zealand Dollar.