NZD/USD price rises as China services PMI improves
NZD/USD gains as China services PMI hits seven-month high
The NZD/USD pair climbed to 0.5620 during Monday’s Asian session, supported by stronger Chinese economic data. The Caixin Services PMI for December rose to 52.2, up from 51.5 in November and above the expected 51.7.
This seven-month high signals growth in China’s services sector, boosting the New Zealand Dollar (NZD) due to strong trade ties with China.
NZD/USD price movement (Oct 2024 - Jan 2025) Source: TradingView.
China’s policies support NZD strength
The People’s Bank of China (PBOC) announced new measures to stabilize the market, including plans for liquidity injections and potential interest rate cuts. These moves strengthened optimism for the Kiwi. However, U.S. President-elect Donald Trump’s threat of an additional 10% tariff on Chinese goods raises concerns about economic stability.
Fed’s policy outlook weighs on Kiwi
Despite the positive sentiment, the U.S. Dollar (USD) remains strong due to the Federal Reserve’s hawkish stance. Fed Chair Jerome Powell reiterated the need for restrictive policies based on upcoming economic data. Key U.S. reports, such as Nonfarm Payrolls (NFP) and unemployment figures due later this week, are expected to influence the market.
NZD/USD faces resistance at 0.5650 and 0.5700, with support levels at 0.5580 and 0.5500. A breakout above 0.5650 could strengthen bullish momentum, while a dip below 0.5580 may signal further losses.
In our previous report, we covered how China’s stimulus hopes boosted the pair above 0.5600 despite tariff concerns. This trend persists as the Kiwi navigates global economic uncertainties.
