NZD/USD Stays Under Pressure Near 0.5850 Despite China’s Strong Services PMI

The New Zealand Dollar (NZD) continues to struggle against the US Dollar (USD), with NZD/USD trading around 0.5860 in Wednesday’s early Asian session. This comes even after stronger-than-expected Chinese services data, which usually supports the Kiwi due to New Zealand’s close trade links with China.

Chinese Data Fails to Lift the Kiwi

Fresh data from China’s Caixin Services PMI showed a jump to 53.0 in August, beating market expectations of 52.5 and marking an improvement from July’s 52.6. Normally, upbeat Chinese services activity provides a boost for the NZD, but risk-off sentiment in global markets has overshadowed the positive news.

Safe-Haven Demand Lifts the US Dollar

A global bond market sell-off has spurred caution among investors, driving flows into safe-haven assets like the USD. Concerns over rising debt levels in major economies have fueled this move, limiting NZD’s upside despite supportive fundamentals from China.

Fed Policy Outlook: A Double-Edged Sword

While safe-haven demand supports the Greenback, growing expectations of a Federal Reserve (Fed) rate cut in September are capping further USD gains. According to the CME FedWatch Tool, traders now price in a 91% chance of a 25 basis point rate cut, up from 85% a week ago. Dovish remarks from Fed officials, including suggestions of more cuts ahead if labor market conditions weaken, could weigh on the USD in the coming weeks.

What’s Next for NZD/USD?

• Support: 0.5830 followed by 0.5800
• Resistance: 0.5900 and 0.5945
• Key Events: US JOLTS Job Openings & Fed Beige Book (Wednesday), US Nonfarm Payrolls (Friday)

The pair’s near-term direction will depend on upcoming US labor market data and Fed commentary. A weaker jobs outlook could pressure the USD further, offering the Kiwi a chance to rebound.

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