NZD/USD holds positive ground above 0.6000 amid trade optimism-fx

NZD/USD holds positive ground above 0.6000 amid trade optimism-fx

The New Zealand Dollar (NZD) has been trading in positive territory against the US Dollar (USD), with the NZD/USD pair holding ground above 0.6000 in recent sessions. This strength is largely attributed to optimism surrounding potential trade deals between the US and China, as well as other positive developments in the global economic outlook.

In the early Asian session on Thursday, the NZD/USD pair strengthened to around 0.6055, driven by improved risk sentiment and expectations of trade deals that could bolster the global economy [2]. This optimism was further supported by the US and China's plans to discuss a tariff deadline extension next week, which could potentially mitigate trade tensions [2].

On Friday, the NZD/USD pair gained further ground, reaching around 0.6035, amid mixed results from the US economic docket [3]. The US flash Manufacturing PMI dropped to 49.5 in July, indicating a slight slowdown in manufacturing activity, while the Services PMI improved to 55.2, suggesting a pickup in service sector growth [3]. These mixed results contributed to a slight depreciation of the US Dollar, providing additional support to the NZD/USD pair.

In addition to trade optimism, the New Zealand Dollar is also influenced by the performance of the Chinese economy, as China is New Zealand's biggest trading partner. High dairy prices, which are a significant export for New Zealand, also contribute positively to the NZD's valuation [2].

The Reserve Bank of New Zealand (RBNZ) is also expected to play a role in the NZD's performance. The RBNZ aims to maintain inflation between 1% and 3% over the medium term, and any changes to interest rates could impact the NZD/USD pair. Currently, markets have priced in an 80% possibility of a 25 basis points (bps) cut in August, though investors believe the easing cycle may be nearing its end [2].

Overall, the NZD/USD pair has benefited from a combination of trade optimism, positive economic data, and expectations of a rate cut from the RBNZ. However, any signs of renewed trade tensions or weaker-than-expected economic data could potentially exert selling pressure on the NZD/USD pair.

References:
[1] https://www.nasdaq.com/articles/dax-nearly-1-stocks-extend-gains-trade-deal-optimism
[2] https://www.fxstreet.com/news/nzd-usd-gathers-strength-to-above-06050-on-trade-optimism-202507240120
[3] https://www.fxstreet.com/news/nzd-usd-holds-positive-ground-above-06000-amid-trade-optimism-202507250111