The US Federal Reserve is expected to announce a quarter-point interest rate cut this week, shrugging off the economic uncertainty raised by Donald Trump's US election victory to continue easing borrowing costs on the back of cooling inflation.

NZD/USD trades down by over three quarters of a percent in the 0.5940s as the US Dollar (USD) strengthens across the board following the announcement that the Republican nominee Donald Trump won the US presidential election.

The US Federal Reserve is expected to announce a quarter-point interest rate cut this week, shrugging off the economic uncertainty raised by Donald Trump's US election victory to continue easing borrowing costs on the back of cooling inflation.

Markets are pricing in a near-certainty that the FOMC will lower its benchmark rate by a quarter percentage point.

The Federal Reserve faces a starkly different outlook for growth and inflation now that former President Donald Trump looks to have secured his return to the White House, only this time with the likely support of both Houses of Congress for his tax, spending and tariff plans.

The Greenback was set for its biggest one-day gain since 2020, boosted by Trump’s victory and the rising chances of a “Red Sweep.” Up next is the Fed meeting, where a 25-basis-point rate cut is widely expected by investors.

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, retreats as uncertainty surrounding the upcoming US presidential election dampens gains from upbeat service sector data.