In Wednesday's early European session, the NZD/USD pair rises somewhat to approximately 0.5945.
At its policy meeting on September 16–17, traders increase their bets that the Fed would reduce borrowing costs.
Last month, China's CPI fell 0.4% from a year earlier, which was worse than expected.
Some buyers are drawn to the NZD/USD pair around 0.5945 on Wednesday in the early European session. The US dollar (USD) is depreciating vs the New Zealand dollar (NZD) because to the possibility of a big rate drop by the US Federal Reserve (Fed). In search of new momentum, traders await the US Producer Price Index (PPI) inflation data for August later on Wednesday.
As growing worries about a slowing US labor market feed predictions of Fed rate cuts as early as next week, the greenback finds it difficult to gain ground. For the year before March 2025, annual adjustments to Nonfarm Payrolls (NFP) statistics revealed a decrease of 911,000 from the original projection.
More and more traders are expecting the Fed to ease more. According to the CME FedWatch tool, money markets have fully priced in a 25 basis point (bps) rate decrease, but the likelihood of a greater 50 bps reduction has also increased to about 12%.
According to Kieran Williams, head of Asia FX at InTouch Capital Markets, "the bar for a 50 bp shift is high; there would likely need to be a major adverse surprise in core inflation to give doves cover."
While wholesale price deflation continued, China's Consumer Price Index (CPI) inflation dropped more than anticipated in August, potentially limiting the pair's upside. The National Bureau of Statistics of China said Wednesday that the country's CPI fell 0.4% YoY in August after declining 0% earlier. This number was lower than the -0.2% market forecast.
As expected by the market, China's Producer Price Index (PPI) fell 2.9% year over year in August after falling 3.6% in July. A common indicator of the state of the Chinese economy is the country's CPI. A poor CPI indicates slow demand in the Chinese economy, which hurts the New Zealand dollar, which is a proxy for China.
At its policy meeting on September 16–17, traders increase their bets that the Fed would reduce borrowing costs.
Last month, China's CPI fell 0.4% from a year earlier, which was worse than expected.
Some buyers are drawn to the NZD/USD pair around 0.5945 on Wednesday in the early European session. The US dollar (USD) is depreciating vs the New Zealand dollar (NZD) because to the possibility of a big rate drop by the US Federal Reserve (Fed). In search of new momentum, traders await the US Producer Price Index (PPI) inflation data for August later on Wednesday.
As growing worries about a slowing US labor market feed predictions of Fed rate cuts as early as next week, the greenback finds it difficult to gain ground. For the year before March 2025, annual adjustments to Nonfarm Payrolls (NFP) statistics revealed a decrease of 911,000 from the original projection.
More and more traders are expecting the Fed to ease more. According to the CME FedWatch tool, money markets have fully priced in a 25 basis point (bps) rate decrease, but the likelihood of a greater 50 bps reduction has also increased to about 12%.
According to Kieran Williams, head of Asia FX at InTouch Capital Markets, "the bar for a 50 bp shift is high; there would likely need to be a major adverse surprise in core inflation to give doves cover."
While wholesale price deflation continued, China's Consumer Price Index (CPI) inflation dropped more than anticipated in August, potentially limiting the pair's upside. The National Bureau of Statistics of China said Wednesday that the country's CPI fell 0.4% YoY in August after declining 0% earlier. This number was lower than the -0.2% market forecast.
As expected by the market, China's Producer Price Index (PPI) fell 2.9% year over year in August after falling 3.6% in July. A common indicator of the state of the Chinese economy is the country's CPI. A poor CPI indicates slow demand in the Chinese economy, which hurts the New Zealand dollar, which is a proxy for China.
