• NZD/USD gains some 0.15% after hitting a daily low at 0.5660.
• The RBNZ’s hiking 50 bps on Wednesday capped the NZD/USD fall, despite US dollar strength.
• US employment data shows solid hiring continues; Services PMIs were mixed.

The NZD/USD erases some of its earlier losses as Wall Steers closes with minimal losses, as sentiment improved in the last hour of the New York session. Nevertheless, traders’ narrative for a possible pivot should be set aside as Fed officials continue their hawkish rhetoric. At the time of writing, the NZD/USD is trading at 0.5746, above its opening price by 0.28%.

NZD/USD trims earlier losses, despite a solid US dollar

Earlier, the San Francisco Fed President Mary Daly said that inflation remains high, adding that more rate hikes are needed. She emphasized that the Fed is “resolute” on raising rates further to bring inflation down.

Data-wise, the US economic docket revealed that S&P Global Services and Composite PMIs, improved but remained below the 50 expansion/contraction level. Contrarily, the ISM Non-Manufacturing PMI remained at expansionary territory, at 56.7, exceeding expectations, but below August’s 56.9.

Meanwhile, the ADP National Employment data portrayed that US companies remain hiring at a solid pace, adding 208K jobs to the labor force, exceeding estimates of 132K and a prelude to Friday’s Nonfarm Payrolls figures. Some minutes later, the US Commerce Department revealed that the US Trade deficit narrowed by 4.3% to $67.4 billion in August, the lowest since May 2021.

The NZD/USD traded as low as 0.5660 before jumping back above the 0.5700 figure, pairing the earlier drop. In the meantime, the US Dollar Index, a gauge of the buck’s value against a basket of peers, gains 0.90%, at 111.187, snapping five days of losses.

On the New Zealand side, the Reserve Bank of New Zealand (RBNZ) hiked rates as expected, 50 bps. Additionally, the RBNZ’s Governor Orr commented that further rate hikes were coming and added that the board discussed going 50 or 75 bps, contrary to what the RBA did a day before.

What to watch

The New Zealand Economic docket is empty. On the contrary, the US calendar will feature Initial Jobless Claims, alongside further Fed speaking.

NZD/USD Key Technical Levels