The NZD/USD pair is on the rise, trading around 0.6180 during early European hours on Wednesday. New Zealand’s first-quarter data showed a significant increase in export volumes and a strong rebound in Terms of Trade, boosting the New Zealand Dollar (NZD). The index, which measures the ratio of export prices to import prices, rose by 5.1%, exceeding market expectations.
China’s Caixin Services PMI for May came in at 54.0, surpassing expectations and marking the 17th consecutive month of expansion in services activity. This positive news could have supported the NZD as any changes in the Chinese economy can impact the Kiwi market due to their close trade partnership.
Speculation is growing stronger that the Federal Reserve (Fed) will begin reducing interest rates starting from the September meeting, following weak US economic data. On Tuesday, US Job Openings declined to the lowest level since February 2021, indicating a potential slowdown in the labor market.
According to the CME FedWatch Tool, the probability of a Fed rate cut of at least 25 basis points has increased to nearly 64.9%, up from 46.3% the previous week. This could further support the NZD/USD pair’s appreciation in the near future.