NZD Surges as Fed Signals No Urgency for October Rate Hike
The New Zealand Dollar (NZD) gained strength against its US counterpart as the Federal Reserve signaled no urgency for an immediate rate hike in October. NY Fed President John Williams made dovish remarks, pushing back against expectations of a looming rate increase. This led to a sharp drop in the probability of an October rate hike from 70.9% to 45%, according to the CME FedWatch Tool.
The NZD's rise was also supported by strong economic data from China, its primary trading partner. The Manufacturing PMI climbed back into expansion territory at 50.1 in September, while the Non-Manufacturing PMI rebounded significantly to 50.2. This broad-based recovery in China further boosted the Kiwi.
The NZD/USD pair currently trades around 0.5650, having extended its decline below short- and medium-term trend measures. The pair remains under pressure from its downtrend, with immediate resistance appearing at the nine-period EMA near 0.5682.