NZD/USD updates monthly lows near 0.6150

• The NZD/USD pair has fallen to around 0.6150 due to the bearish sentiment in the markets.
• Investors expect U.S. retail sales to grow 0.4%, down from a 0.3% increase in November.
• The RBNZ's Conway is expected to push back market expectations of an early rate cut.

The NZD/USD pair has set a new monthly low near 0.6150 early in the New York session. The pair has faced sharp selling as investors have rushed into safe-haven assets amid deepening crises in the Middle East region and uncertainty over when the Federal Reserve (Fed) will start its cycle. of rate cuts.

The S&P 500 is expected to open lower, taking into account negative signals from futures overnight. Market sentiment is quite bearish as Iran-backed Houthi rebels have threatened to strike back over airstrikes launched by the US military in Yemen.

Meanwhile, the Dollar Index (DXY) appears firm near fresh weekly highs around 103.20, as market participants are reviewing strong bets supporting a rate cut by the Fed in March. Investors have been cautious about the possibility of the Fed cutting interest rates starting in March, as December inflation data remained below forecasts.

On the other hand, Atlanta Fed President Raphael Bostic stated that it is too early to talk about rate cuts, as inflation's progress towards the 2% target has slowed.

Investors are awaiting US retail sales data for December, due out on Wednesday. The economic data is expected to grow 0.4% compared to the 0.3% increase in November.

As for the New Zealand dollar, investors await Reserve Bank of New Zealand (RBNZ) policymaker Paul Conway's speech in which he is expected to push back market expectations supporting a further rate cut. soon. Inflation in the New Zealand economy is significantly higher than required by RBNZ policymakers, which would allow them to maintain a restrictive stance.