NZD maintains its position above 0.59 level after focus shifts to Chinese PMI and US Non-farm Payroll data

Daily Currency Update

With bias remaining on the downside, the market took well to the Kiwi’s holding above the 0.59 level, providing glimpses of light for a corrective move higher. This traction can mainly be associated with the USD consolidating its previous end-of-week gains. Federal Reserve Chair, Jerome Powell’s remarks on Friday are still being evaluated by the markets.

Powell made it clear that monetary policy is still dependent on data that the evidence supports another interest rate hike. He did not, however, make any commitments to do so. Instead, Powell affirmed that the economy hadn't cooled off as anticipated and that rates would be held at their current levels until inflation started to slow down.

On the Kiwi front, New Zealand Minister of Finance Grant Robertson on Monday urged the public service to slice spending on consultants and contractors as “New Zealand’s government is tightening its belt as a domestic recession and concerns about China’s faltering economy erode tax revenue and strain its budget."

The market's attention now shifts to the US economic calendar releases this week, which include mid- and high-tier labour market statistics, such as the Job Openings and Labor Turnover Survey (JOLTS) numbers from July and the ADP Employment Change and Non-farm Payrolls from August. Additionally, investors will closely monitor the Gross Domestic Product (GDP), ISM PMI, and Core Personal Consumption Expenditures (PCE) to help them predict how the next Fed meetings will go.