- NZD/USD rose as recent PCE inflation data eased concerns over unexpected US inflation spikes.
- The NZD receives support from stronger China’s Caixin Manufacturing PMI, which rose to 50.8 in February from 50.1 prior.
- President Trump’s additional 10% tariff on Chinese imports is set to take effect on Tuesday.
NZD/USD halted its six-day losing streak, trading around 0.5600 during the Asian hours on Monday. The pair gains value as the US Dollar (USD) weakens following the release of January’s Personal Consumption Expenditures (PCE) inflation data on Friday. The report met expectations, easing concerns about unexpected inflation spikes in the US.
The US Dollar Index (DXY), which measures the USD against six major currencies, loses ground after three consecutive sessions of gains, hovering around 107.30 at the time of writing. However, downside pressure on the Greenback may be limited as US Treasury yields rise, with the 2-year and 10-year Treasury yields currently at 4.01% and 4.23%, respectively.
Meanwhile, the New Zealand Dollar (NZD) gains support following recent economic data from China, a key trading partner. Data released Monday showed China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in February from 50.1 in January, surpassing market expectations of 50.3.
On Saturday, official data revealed that the NBS Manufacturing PMI improved to 50.2 in February from 49.1, beating the forecast of 49.9. The NBS Non-Manufacturing PMI also climbed to 50.4 from 50.2, exceeding the expected 50.3.
However, the NZD’s upside may be capped by rising global trade tensions. Over the weekend, US President Donald Trump announced an additional 10% tariff on Chinese imports starting Tuesday, adding to last month’s 10% tariff. On Thursday, Trump stated on Truth Social that 25% tariffs on Canadian and Mexican goods will take effect on March 4.
