NZD/USD flat-lines near 0.5940 ahead of Chinese PMI data
- NZD/USD remains flat around 0.5943 amid the quiet trading session.
- Market players bet on a less aggressive Federal Reserve (Fed) stance.
- Chinese authorities plan to introduce more stimulus measures, which lift the Kiwi.
- Investors await Chinese Services PMI, US ISM Services PMI.
The NZD/USD pair trades sideways below the crucial 0.6000 barrier during the early Asian session on Tuesday. The US Dollar (USD) posts modest losses near a monthly high of around 104.10 on a quiet session as Wall Street closed for Labor Day. The pair currently trades around 0.5943, gaining 0.05% on the day.
The US economic data showed a mixed result last week. The US Nonfarm Payrolls (NFP) for August came in at 187K, beating the expectation of 170K and 157K in the previous reading. While, The Unemployment Rate dropped significantly to 3.8%, compared to the market consensus of 3.5% and 3.5% prior. The US Manufacturing PMI came in at 47.6 versus 46.4 prior and better than 47.0 expected.
Market players bet on a less aggressive Federal Reserve (Fed) stance. According to the CME FedWatch Tool, the possibility of an interest rate hold at the September meeting remains at 93%, which might cap the upside in the USD.
The New Zealand economic docket is quite empty this week and the headline surrounding the China stimulus plan might influence the Kiwi dynamic. On Monday, Chinese authorities plan to introduce more measures, including the easing of restrictions on the purchase of homes, to stimulate China's faltering economy, according to Reuters. In response to the news, the Greenback is weakened against its rivals due to risk appetite. This, in turn, lifts the China-proxy New Zealand Dollar (NZD).
About the data, the New Zealand Terms of Trade Index improved to 0.4% in the second quarter, compared to a decline of 1.5% in the previous reading and an expected drop of 1.3%. The ANZ – Roy Morgan Consumer Confidence for August revealed last week that consumer confidence in New Zealand increased marginally to 85 in August from 83.7 in July, but remained subdued.
Looking ahead, the Chinese Caixin Services PMI for August will be released on Tuesday. The US ISM Services PMI will be due on Wednesday while Fed officials enter their blackout period ahead of the September’s Federal Open Market Committee (FOMC) meeting Traders will take cues from the data and find trading opportunities around the NZD/USD pair.