Kiwi dollar weakens despite upbeat Chinese services PMI
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Daily Currency Update
The NZDUSD pair is trading lower near US$0.5860 in early Asian trading on Wednesday, as the New Zealand Dollar (NZD) struggles to gain traction despite stronger-than-expected Chinese economic data. Data released yesterday showed that China’s Caixin Services Purchasing Managers' Index (PMI) rose to 53.0 in August, up from 52.6 in July, beating market expectations of 52.5. The reading points to a steady expansion in China’s services sector and adds to the narrative of a gradual economic recovery in the world’s second-largest economy. As China is New Zealand’s largest trading partner, upbeat Chinese data typically supports the NZD. However, in this instance, the NZD has failed to respond, as broader market sentiment remains cautious. Traders are instead turning their focus to the upcoming US data releases for signals on the Federal Reserve’s next policy moves. Expectations that the Fed may keep interest rates elevated for longer continue to underpin demand for the US dollar, limiting upside potential for the NZDUSD pair. In the absence of domestic catalysts, the NZD remains vulnerable to external developments, particularly those related to US monetary policy and global risk sentiment. Technically, immediate support lies around the 0.5850 area. A break below this level could pave the way for further downside, while any dovish signals from the Fed or improvement in risk appetite could help lift the pair toward the US$0.5900 resistance zone.Key Movers
The USDJPY pair extended gains during the European session on Wednesday, rising toward the 149.00 level as the Japanese yen (JPY) underperforms amid a sharp sell-off in Japanese government bonds (JGBs). Yen weakness has intensified following a significant rise in long-term JGB yields, with 30-year yields climbing to historic highs near 3.29%. The move reflects growing investor concerns over Japan’s ballooning government debt, prompting a broad reduction in exposure to longer-dated JGBs. As bond prices fall and yields rise, the resulting pressure on the yen is pushing the currency lower against its major peers. Meanwhile, market participants are closely watching upcoming US labour market data. The US JOLTS Job Openings report for July is due at 14:00 GMT, and is expected to show around 7.4 million new job postings—largely unchanged from June’s 7.44 million. Traders will be looking for any signs of softening or resilience in labour demand that could influence the Federal Reserve's policy trajectory. However, the spotlight this week remains firmly on Friday’s Nonfarm Payrolls (NFP) report for August. The data is expected to play a pivotal role in shaping expectations for the Fed’s next move. A strong print could reinforce the “higher for longer” narrative on interest rates, while any significant downside surprise may revive speculation about a potential policy pivot. In the near term, the USDJPY pair appears supported by rising US Treasury yields and a broad demand for the US dollar, while the yen remains vulnerable to domestic bond market volatility and rising rate differentials.Expected Ranges
- NZD/USD: 0.5750 - 0.5950 ▼
- NZD/EUR: 0.4900 - 0.5100 ▼
- GBP/NZD: 2.2850 - 2.3050 ▲
- NZD/AUD: 1.1050 - 1.1250 ▼
- NZD/CAD: 0.8000 - 0.8200 ▼