NZD/USD Holds Above 0.6000 on US Trade Hopes and Mixed PMI Data

NZD/USD Holds Above 0.6000 on Trade Optimism and Mixed US PMI Readings

The NZD/USD pair remained in positive territory, trading near 0.6035 during Friday’s early Asian session. Investor sentiment was buoyed by renewed trade optimism and mixed U.S. economic data, providing moderate support to the New Zealand Dollar (NZD) against a slightly weaker U.S. Dollar (USD).

US-China Trade Talk Prospects Support Risk Sentiment

The market found comfort in news that U.S. and Chinese officials are expected to meet next week to negotiate a potential extension to the current tariff deadline. Hopes for progress in these discussions have fueled a risk-on tone, which typically benefits commodity-linked currencies like the NZD.

Mixed US PMI Figures Add Pressure to the USD

On the data front, U.S. flash PMI figures released by S&P Global painted a mixed economic picture:

Manufacturing PMI fell to 49.5 in July from 52.0 in June, below expectations of 52.5.
Services PMI rose to 55.2, beating the forecast and improving from 52.9 in June.
Composite PMI also climbed to 54.6 from 52.9.

While the services sector shows resilience, the manufacturing slowdown has prompted traders to lower expectations for aggressive Fed tightening.

Fed Policy Outlook: Rate Hold Likely, Eyes on Tariffs

The Federal Open Market Committee (FOMC) is scheduled to meet next week, with markets widely expecting the central bank to keep interest rates unchanged. Policymakers are likely to remain cautious as they assess the potential inflationary effects of new tariffs.

According to CME’s FedWatch Tool, there is nearly a 60% chance of a 25-basis point rate cut in September, further weighing on the USD.

Related Read: What to Expect from the July FOMC Meeting

Looking Ahead: Durable Goods Orders in Focus

Traders now await U.S. Durable Goods Orders for June, due later Friday, which may offer fresh insights into the health of the U.S. economy and guide short-term moves in the NZD/USD pair.