- NZD/USD is gaining ground, rising more than 2% amid a weak US dollar.
- The US Manufacturing PMI was weaker than expected, giving preliminary signs that demand is slowing.
- NZD/USD traders keep an eye on the NZIER report, along with US Durable Goods and JOLT openings ahead of Friday’s US NFP.
NZDUSD trims part of last Friday’s losses, recovering 0.6700 on a boost in risk appetite. The weakening of economic activity in the US and some readings that show that inflation in the manufacturing sector is easing, are perceived by market agents as a reason for the Fed to reduce its rate of tightening. Hence, NZD/USD trades at 0.5720, up 2.25% from its opening price.
On Monday, the NZD/USD started trading around 0.5600 and rose towards its daily high at 0.5731 late in the European session.
The Institute for Supply Management (ISM) revealed that the Manufacturing PMI expanded at its slowest pace in two years, with September PMI slowing to 50.9 from August’s 52.8. In the same report, new orders fell to 47.1 from 51, indicating that demand is softening, while prices fell for the sixth month in a row.
Elsewhere, the Dollar Index, which measures the value of the dollar against a basket of currencies, continues to slide as I write, losing 0.45% to 111.671. In addition, US Treasury bond yields fell, following the release of weaker-than-expected ISM manufacturing readings, coupled with the 180-degree U-turn in the budget of 45% tax cuts in the UK. .
Apart from this, the New Zealand calendar on Monday was absent. However, the NZIER Quarterly Business Opinion Survey will be reported on Tuesday, to be released around 21:00 GMT.
what to watch
Close to New Zealand, the Reserve Bank of Australia (RBA) is expected to hike rates by 50 basis points late on Tuesday. In the US, the calendar will reveal Durable Goods Orders along with Job Openings JOLTs on Tuesday, ahead of the September Non-Farm Payrolls report to be announced on Friday.
Key NZD/USD Technical Levels
Source: Fx Street
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