New Zealand dollar holds modest gains amid weak China data and cautious markets
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Daily Currency Update
The New Zealand dollar (NZD) is holding onto small gains on Tuesday after bouncing off multi-month lows last Friday around 0.5750, but it’s still struggling to break above 0.5800. This hesitation comes as markets stay cautious, partly due to disappointing economic data from China, New Zealand’s biggest trading partner. China’s latest manufacturing report showed no growth in September, with the official PMI sitting at 50.0, below expectations. Services improved slightly but still stayed below the level that signals growth, which suggests China’s economy isn’t picking up much. Since New Zealand relies heavily on China for trade, weaker Chinese activity can limit demand for NZD, keeping the currency under pressure for now. The New Zealand dollar (NZD) is holding onto modest gains on Tuesday after bouncing back from multi-month lows near 0.5750 last Friday, but it’s struggling to climb above 0.5800. This cautious trading reflects worries about weak economic data from China, New Zealand’s largest trading partner. China’s latest manufacturing report showed no growth in September, with its PMI at 50.0—below expectations—and while the services sector improved slightly, it remains in contraction territory. Since New Zealand depends heavily on Chinese demand for its exports, this sluggish activity is keeping a lid on the NZD for now.Key Movers
The US Bureau of Labor Statistics has released its latest Job Openings and Labor Turnover Survey (JOLTs) data, revealing a modest increase in job vacancies across the country. The number of open positions rose to 7.227 million, slightly exceeding economists’ expectations of 7.190 million. This stronger-than-anticipated figure underscores the resilience of the US labor market and provides important insight into hiring trends and workforce dynamics. JOLTs data, collected from employers nationwide, offers a comprehensive snapshot of the current state of employment, including job openings, recruitment activity, hires, and separations. The uptick in job vacancies suggests that demand for labor remains robust, even as businesses continue to face challenges in filling available roles. From a market perspective, the stronger job openings report is generally supportive—or bullish—for the US dollar (USD). A high number of vacancies signals a tight labor market, which can drive wage growth as companies compete for scarce talent. Rising wages, in turn, can contribute to higher inflationary pressures. This dynamic raises the likelihood that the Federal Reserve may maintain or even increase interest rates to keep inflation in check, making the USD more attractive to global investors seeking higher returns. However, the data also highlights an ongoing concern for employers: the difficulty in finding qualified candidates to fill these positions. This mismatch between job openings and available workers could lead to sustained wage pressures, which may translate into higher costs for businesses and potentially broader inflationary impacts over the longer term. Overall, while the increase in job openings reflects a strong labor market, it also underscores the complex challenges ahead for policymakers balancing economic growth, inflation, and labor market health.Expected Ranges
- NZD/USD: 0.5700 - 0.5900 ▲
- NZD/EUR: 0.4850 - 0.5050 ▲
- GBP/NZD: 2.3150 - 2.3350 ▼
- NZD/AUD: 1.1300 - 1.1500 ▼
- NZD/CAD: 0.7950 - 0.8150 ▲