- The NZD/USD fights after disappointing economic data of China.
- The PMI of Caixin Services of China fell to 50.7 in April from 51.9 in March, well below the forecast of 51.7.
- The US dollar receives support from the expectations that the Federal Reserve will maintain stable rates on Wednesday.
The NZD/USD is withdrawing around 0.5960 during the Asian session on Tuesday after two consecutive earnings. The setback follows a fall in the New Zealand dollar (NZD), pressed by disappointing economic data of China.
The China Services sector grew at its slowest pace since September, with the Caixin Purchase Manager (PMI) index of Caixin Services falling to 50.7 in April from 51.9 in March, well below the forecast of 51.7. The weakest reading of the expected adds concerns that American tariffs are impacting demand and weighs on the NZD, since China is the largest commercial partner in New Zealand.
The attention now focuses on the next New Zealand unemployment report, which is expected to show a higher unemployment rate. This could reinforce the expectations of greater monetary relief, with the markets already assessing in 75% the possibility of a rate cut of 25 basic points at the meeting of the New Zealand Reserve Bank (RBNZ) later this month. A total of three rates cuts are anticipated this year.
Meanwhile, the American dollar index (DXY) is bouncing about 99.80 after consecutive losses, supported by the expectations that the Federal Reserve (FED) will maintain the stable rates on Wednesday. Market attention is firmly focused on the comments of the president of the FED, Jerome Powell, amid ongoing tariff tensions and the pressure of President Trump to cut rates.
The US Treasury Secretary, Scott Besent, said on Monday that the US is “very close to some agreements,” repeating Trump’s comments on the weekend about the proximity of trade agreements. However, Trump ruled out any immediate conversation with Chinese President Xi Jinping. The China Ministry of Commerce confirmed that it is reviewing an American proposal to restart negotiations.
Economic indicator
Caixin PMI of China Services
The Caixin PMI of Services of China, published by Markit Economicsis based on data compiled from the answers to monthly questionnaires sent to purchasing executives of more than 400 private companies in the service sector. The panel has been carefully selected to reproduce exactly the true structure of the service economy.
Read more.
Last publication:
May May 06, 2025 01:45
Frequency:
Monthly
Current:
50.7
Dear:
51.7
Previous:
51.9
Fountain:
IHS MARKIT
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
