New Zealand Dollar remains firm above 0.5700 after Chinese services PMI data
The NZD/USD pair gathers strength to around 0.5705 during the Asian trading hours on Friday. The New Zealand (NZD) remains strong following the Chinese economic data. The US markets will be closed on Friday in observance of Independence Day.
Data released by RatingDog on Friday showed that China's Services Purchasing Managers' Index (PMI) eased slightly to 54.1 in June from 54.4 in May. However, this figure still marked the third-steepest increase in services activity in nearly three years. Services exports grew for a second consecutive month, expanding at the fastest rate since October 2024. The China-proxy Kiwi edges higher following China's PMI report.
On the central bank’s front, ASB Bank dropped its call for a July hike from the Reserve Bank of New Zealand (RBNZ) and expects the RBNZ to keep the Official Cash Rate (OCR) on hold at the upcoming July meeting, followed by steady 25-basis-point increases starting in September, with the OCR peaking at 3.25% by early 2027.
Signs of a cooling US labor market have prompted financial markets to dial back expectations for a near-term interest rate hike from the US Federal Reserve (Fed), weighing on the Greenback against the NZD. Nonfarm Payrolls (NFP) rose by 57,000 jobs in June, the Labor Department's Bureau of Labor Statistics reported on Thursday. Economists had forecast payrolls advancing 110,000.
Meanwhile, the Unemployment Rate fell to 4.2% during the same period, down from 4.3% in May. Financial markets are now pricing in nearly a 52% odds of a US rate hike by September, down from 66% before the jobs data, according to the CME FedWatch tool.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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