NZD/USD trades with mild positive bias below 0.6150, Chinese Trade Balance data looms

The NZD/USD pair trades with a mild positive bias below the mid-0.6100s during the early Asian session on Thursday. The softer US Dollar (USD) to multi-week lows after Chair Powell’s first testimony provides some support to the NZD/USD pair. At press time, the pair is trading at 0.6130, gaining 0.02% on the day. 

The US ADP private sector employment rose 140K in February from 111K in January, below the market expectation of 150K. Meanwhile, January JOLTS job openings dropped to 8.863M versus 9.026M prior, below the consensus of 8.900M. Investors expect the US Nonfarm Payrolls (NFP) to rise by 200K in February from the previous reading of 353K.

On Wednesday, Federal Reserve (Fed) Chair Jerome Powell said during three hours of testimony that interest rate cuts are likely at some point in 2024, but is not yet ready to say when. Powell noted that the central bank thinks it’s not appropriate to cut the rate until they have confidence that inflation is moving sustainably toward 2%. The rising prospects of a rate cut by the Fed in June drag the Greenback lower and create a tailwind for NZD/USD. 

The Reserve Bank of New Zealand (RBNZ) chief economist Paul Conway said the central bank might begin to cut interest rates sooner than it expects if the US Fed starts easing later this year. Conway further stated that Fed rate cuts could boost the New Zealand Dollar (NZD), which reduces inflationary pressures.

Moving on, traders will keep an eye on the Chinese Trade Balance data for February. Later in the day, the US weekly Initial Jobless Claims, the second testimony by Chair Powell, and Balance Trade figures will be due. Also, the Fed’s L. Mester is set to speak.