The NZD/USD pair has seen a slight uptick for the second consecutive day, although the momentum lacks strength. The market response to China’s Caixin Services PMI for June was muted. The focus now shifts to the upcoming FOMC meeting minutes for insights into the Fed’s rate-cutting plans.
The NZD/USD pair has shown some gains after bouncing back from its recent low, but remains below the 50-day Simple Moving Average support level. Chinese data released by Caixin showed a decline in the Services PMI from 54.0 in May to 51.2 in June, below market expectations. This has raised concerns about a slowdown in China’s economy and is holding back the Kiwi currency. Additionally, speculations of an earlier rate cut by the Reserve Bank of New Zealand are also impacting the pair’s upward movement.
On the other hand, the US Dollar is struggling to gain traction amidst expectations of a rate cut by the Federal Reserve later this year. Fed Chair Jerome Powell’s recent remarks on the US economy’s progress towards inflation goals have reinforced these expectations. This, coupled with declining US Treasury bond yields, is weighing on the USD and providing some support to the NZD/USD pair.
Investors are now looking towards key US economic indicators like the ADP report on private-sector employment and the ISM Services PMI. However, all eyes are on the FOMC meeting minutes and the upcoming US Nonfarm Payrolls report, which will influence market expectations regarding the Fed’s rate-cutting strategy. These factors will likely determine the direction of the USD and subsequently impact the NZD/USD pair’s movement in the near future.