NZD/USD remains on the defensive below 0.5950, US data eyed

The NZD/USD pair remains on the defensive below the mid-0.5900s during the early Asian trading hours on Thursday. The stronger US Dollar (USD) and higher Treasury yields lend some support to NZD/USD. The pair currently trades near 0.5928, gaining 0.09% for the day.

The latest data on Thursday showed that New Zealand’s ANZ Business Confidence for September improved to 1.5 from a 3.7 drop in the previous month. Meanwhile, the ANZ Activity Outlook rose to 10.9 in September from 11.2% in the previous reading. The market expected the Reserve Bank of New Zealand to hold the interest rate unchanged in next week’s policy meeting but anticipated the RBNZ would hike again in November.

On the US Dollar front, the US Census Bureau reported on Wednesday that the US Durable Goods Orders rebounded in August, rising 0.2% m/m from a 5.6% drop in the previous reading, against expectations of a 0.5% m/m fall. Additionally, Durable Goods Orders ex Transportation rose by 0.4% m/m, a better than expected of 0.1% rise. Core capital goods orders rose 0.9% from the previous reading of a 0.4% drop, above the market consensus of 0%. Following the upbeat US data, the Greenback gains momentum across the board and acts as a headwind for the NZD/USD pair.

Risk-averse sentiment dominated markets as investors weighed higher for longer rates narrative against growth risks from the possibility of an imminent government shutdown in the US. However, market participants will keep an eye on the Federal Reserve (Fed) Chair Jerome Powell’s speech this week. The less hawkish tone from officials might cap the upside of the USD against its rivals.

Market participants will keep an eye on the US weekly Jobless Claims report, the third revision of Gross Domestic Product (GDP) for the second quarter and Pending Home Sales data due on Thursday. On Friday, the Core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred measure of consumer inflation will be in the spotlight. The annual figure is expected to ease from 4.2% to 3.9%. Traders will take cues from the data and find trading opportunities around the NZD/USD pair.