NZD/USD remains capped under the 0.6100 mark, US Services PMI eyed
- NZD/USD posts modest gains around 0.6095 in Tuesday’s early Asian session.
- Fed’s Bostic said the Fed is under no urgent pressure to cut interest rates given a strong economy.
- China will deliver a top annual political event, which might ease the fear about the fate of the Chinese economy.
The NZD/USD pair remains capped under the 0.6100 mark during the early Asian session on Tuesday. Financial markets will be cautious this week as they await economic data and policy guidance. The US February ISM Services PMI will be due later in the day. The pair currently trades near 0.6095, up 0.02% on the day.
Atlanta Fed President Raphael Bostic said that the Federal Reserve (Fed) is under no urgent pressure to cut interest rates given a strong economy and job market. Bostic further stated that it will likely be appropriate for the Fed to approve two quarter-point rate cuts by the end of this year. San Francisco Fed President Mary Daly said central bank officials are ready to lower interest rates as needed but emphasized there's no urgent need to cut given the strength of the economy.
Investors will take more cues from Fed's Chair Jerome Powell's testimony on Wednesday, which might offer some hints about a broad overview of the economy and monetary policy. The hawkish remarks might lift the US Dollar (USD) and act as a headwind for the NZD/USD pair.
China’s economy has been roiled by a property sector crisis, raising concern about the health of the second-largest economy in the world. Market players will monitor the National People's Congress to see what's on offer when it starts on Tuesday. The development surrounding the stimulus plan from Chinese authorities could boost the China-proxy New Zealand Dollar (NZD) and cap the downside of the NZD/USD pair.
Looking ahead, the US ISM Services PMI will be due on Tuesday, along with the final S&P Global Services PMI, Factory Orders, and the RCM/TIPP Economic Optimism Index. Additionally, the Fed’s M. Barr is set to speak. These events could give a clear direction to the NZD/USD pair.