NZD Slumps as Hawkish Fed Bets Weigh, US PMI in Focus

The New Zealand Dollar extended declines during Tuesday's European session, losing 0.4% against the US dollar to trade near 0.5690. The selloff is largely attributed to growing hawkish bets on the Federal Reserve, which have dampened demand for risk-sensitive currencies like the NZD.

Investors now turn their attention to upcoming US Purchasing Managers' Index (PMI) data, which could provide additional clues on the strength of the US economy and the Fed's policy path. A stronger-than-expected reading may further boost the USD and pressure the NZD, while a miss could trigger a modest recovery.

The kiwi remains vulnerable amid a broadly stronger greenback and cautious market sentiment, with no major domestic catalysts on the horizon.