NZD Holds Steady Ahead of RBNZ Decision

The New Zealand Dollar held steady on Monday, hovering around 0.5910 as traders awaited the Reserve Bank of New Zealand's decision on Wednesday.

The currency received some support from slightly better-than-expected Chinese data, with China's National Bureau of Statistics reporting a Manufacturing Purchasing Managers Index (PMI) of 49.8 in August, beating expectations of 49.7 and above the contraction threshold of 50.

However, investors are more focused on the upcoming RBNZ decision, with the NZIER Monetary Policy Shadow Board suggesting a 25 basis point interest rate hike in September. Traders will also be monitoring guidance on future interest rates, which could support the New Zealand Dollar if there's another tightening move by year-end.

The US Dollar benefited from the hawkish tone adopted by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium, with markets now seeing a 62% chance of a Fed rate hike in September. This repricing of the US monetary policy outlook has provided support to the Greenback and kept NZD/USD around 0.5910.