NZD/USD Extends Gains Above 0.6000 as Weak US Data Pressures the Greenback

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NZD/USD Climbs to 0.6035 on US Economic Weakness

The NZD/USD pair continues its upward trajectory, trading around 0.6035 during Thursday's Asian session. The move is driven primarily by renewed weakness in the US dollar (USD), after softer-than-expected economic data from the US added to investor concerns.

US Economic Data Disappoints: ISM and ADP Fall Short

On Wednesday, data from the Institute for Supply Management (ISM) showed the US Services PMI dropped to 49.9 in May, slipping into contraction territory for the first time in nearly a year. The market had anticipated a reading of 52.0, which amplifies concerns about the US economic outlook.

Meanwhile, the ADP private sector employment report revealed a modest gain of 37,000 jobs in May—sharply lower than April's revised 60,000 and well below the forecast of 115,000. These weak data points fueled selling pressure on the Greenback, allowing the New Zealand dollar (NZD) to capitalize.

🔗 See related: Why US Jobs Data Moves the Forex Market

RBNZ May Slow Its Rate-Cutting Approach

Adding support to the kiwi, expectations are mounting that the Reserve Bank of New Zealand (RBNZ) may adopt a more cautious stance in upcoming meetings. With global uncertainty increasing, the RBNZ could pause or slow its rate-cutting cycle, providing further support for the NZD/USD pair.

🧭 Explore: RBNZ Policy Outlook and Market Implications

Outlook: Eyes on Chinese Caixin Services PMI

Looking ahead, traders will monitor the Chinese Caixin Services PMI, which is due later Thursday. Given New Zealand's close economic ties with China, any upside surprise in Chinese service sector growth could offer additional tailwinds for the kiwi.

Conclusion: NZD/USD Remains Firm on USD Weakness

As macroeconomic uncertainty builds in the US, and with the RBNZ potentially taking a cautious pause, NZD/USD may continue to hold ground above 0.6000. A stronger-than-expected Chinese PMI could solidify short-term bullish sentiment.