NZD/USD Moves Towards 0.6200 As Terms Of Trade And China Services PMI Rise

NZD/USD recovered recent losses and traded around 0.6180 in early European trading on Wednesday. Support for the New Zealand dollar (NZD) came after New Zealand first quarter data showed a sharp increase in export volumes and a strong rebound in terms of trade. The terms of trade index, which measures the ratio of export prices to import prices, rose by 5.1%, compared with a decline of 7.8% in the previous quarter, beating market forecasts for a 3.1% increase.

The Caixin China Services PMI for May was 54.0, above the expected 52.6 and the previous reading of 52.5. This marked the 17th consecutive month of expansion in services activity, showing the fastest pace since July 2023. This could support the NZD as any changes in the Chinese economy could affect the New Zealand market as both countries are close trading partners.

Speculations are growing that the Federal Reserve (Fed) will cut interest rates from its September meeting after a series of weak US economic data, which could be the reason for the appreciation of NZD/USD.

On Tuesday, U.S. JOLTS job openings fell by 296,000 to 8.059 million in April, down from 8.355 million in March and the lowest level since February 2021. The figure also fell short of the market consensus forecast of 8.34 million.

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