NZD/USD jumps above 0.5750 amid prospect of Fed rate cuts

• NZD/USD drifts higher to near 0.5760 in Monday’s early European session, up 0.31% on the day.
• China’s plan to revitalize the agriculture sector and boost consumption lifts the China-proxy Kiwi. 
• The downbeat US PMI data undermine the US Dollar and create a tailwind for the pair. 

The NZD/USD pair gains momentum to around 0.5760 during the early European session on Monday. The New Zealand Dollar (NZD) attracts some buyers after the Chinese government announced its annual policy statement for 2025 on Sunday. Later on Monday, the Chicago Fed National Activity Index for January will be released. 

China will deepen rural reforms to revitalize the agriculture sector and strengthen food security in the face of US tariffs, an economic slowdown, and climate change, according to the State Council’s annual rural policy blueprint. Additionally, Premier Li Qiang said last week that China will direct more efforts to boosting consumption and lifting people's livelihoods. The positive development surrounding China’s stimulus plans supports the China-proxy Kiwi as China is a major trading partner to New Zealand.

The disappointing US economic data, including the S&P Global Purchasing Managers' Index (PMI) released last week, weighs on the Greenback and acts as a tailwind for NZD/USD. The US Composite PMI fell to 50.4 in February from 52.7 in the previous month. 

Meanwhile, the Manufacturing PMI rose to 51.6 versus 51.2 prior, surpassing the forecast of 51.5. The Services PMI dropped to 49.7 in February, compared to 52.9 in January, below the market consensus of 53.0. The reports kept the prospect of interest rate cuts by the Federal Reserve (Fed) intact this year, even though the Fed will remain on hold for the next several months.

(This story was corrected on February 24 at 07:22 to say that China’s plan to revitalize consumption lifts the Kiwi, not the Aussie.)