- NZD/USD gains ground to around 0.6035 in Friday’s early Asian session.
- US flash Manufacturing PMI dropped to 49.5 in July; Services PMI improved to 55.2.
- US and China to discuss tariff deadline extension next week.
The NZD/USD pair attracts some buyers to near 0.6035 during the early Asian trading hours on Friday. Optimism surrounding fresh US trade deals provides some support to the New Zealand Dollar (NZD) against the Greenback. Later on Friday, US Durable Goods Orders for June will be published.
The US Dollar (USD) edges lower amid mixed results from the US docket. US flash Manufacturing PMI declined to 49.5 in July from 52.0 in June, S&P Global showed on Thursday. This figure came in weaker than the 52.5 expected. Meanwhile, the Services PMI rose to 55.2 in July from 52.9, stronger than estimates. Finally, the Composite PMI climbed to 54.6 in July versus 52.9 prior.
The Federal Open Market Committee (FOMC) will meet next week and is anticipated to hold the rate steady as policymakers prefer to wait for clarity on the expected impact of tariffs on inflation. According to CME’s FedWatch tool, markets are now pricing in nearly a 60% odds of a quarter-point September rate cut from the Federal Reserve (Fed).
US Treasury Secretary Scott Bessent is set to meet with Chinese officials in Stockholm next week to discuss extending the deadline for trade negotiations. Tariffs might return to 145% on the US side and 125% on the Chinese side in the absence of a trade deal or discussion extension. Any signals of rising trade tensions might undermine the China-proxy Kiwi, since China is a significant trading partner for New Zealand.
