NZD/USD attracts sellers above 0.5900, focus on US PMI data

• NZD/USD attracts some sellers around 0.5925 amid the Fed’s hawkish stance.
• New Zealand's Trade Balance (NZD) dropped to $-2,291M MoM in August versus $-1,107M prior.
• The higher-for-longer rate narrative from the Federal Reserve (Fed) continues to boost the US Dollar (USD).
• Traders will monitor the preliminary US S&P Global/CIPS PMI data.

The NZD/USD pair loses traction after seeing a rejection at 0.5940 during the early Asian session on Friday. The pair currently trades near 0.5925, down 0.10% on the day. The mixed New Zealand Trade Balance data and the upbeat growth number fail to impress the pair as investors digest the outcome of the Federal Reserve (Fed) meeting on Wednesday.

The latest data released by Statistics New Zealand on Friday revealed that the nation’s Trade Balance (NZD) dropped to $-2,291M MoM in August versus $-1,107M prior. The annual trade deficit improved to $15.54B for the said month versus $-15.88B prior figures. Additionally, Exports eased to $4.99B during the said month versus $5.38B prior whereas Imports improved to $7.28B compared to $6.55B in previous readings.

Earlier on Thursday, New Zealand's economy expanded 0.9% during the second quarter, following 0% in the previous reading. Annually, the second-quarter GDP expanded by 1.8%, compared with the 2.2% growth in Q1 while beating estimates of a 1.2% increase. The upbeat GDP figures might startle the Reserve Bank of New Zealand (RBNZ), which has said that slower growth is needed to curb inflation. These figures could lead to rates holding at their highest level in more than 14 years for longer than expected.

On the USD front, the hawkish stance from the Federal Reserve (Fed) continues to boost the US Dollar (USD) across the board. That said, Fed Chairman Jerome Powell reaffirmed the US central bank’s commitment to achieving a 2% inflation target in a press conference while mentioning that the Fed is ready to raise rates if necessary. This, in turn, lifts the Greenback and acts as a headwind for the NZD/USD pair.

About the data, the weekly Initial Jobless Claims dropped to 201K, the lowest level since January. Meanwhile, the Philly Fed dropped to -13.5 in September from 12.0 in the previous reading, worse than expected of -0.7. Existing Home Sales fell to 4.04M MoM in August from the previous reading of 4.07M.

Looking ahead, market players will take cues from the preliminary US S&P Global/CIPS PMI data for September due on Friday. These figures could give a clear direction to the NZD/USD pair.