NZD/USD trades flat around 0.5650 despite upbeat China Services PMI, Governor Orr resigns
- NZD/USD holds steady after the release of an upbeat China Services Purchasing Managers’ Index.
- Deputy Governor Christian Hawkesby will serve as acting governor until March 31 following Governor Adrian Orr’s resignation.
- US Commerce Secretary Lutnick suggested that President Trump may reconsider his tariff policy less than 48 hours after its implementation.
NZD/USD trims its daily gains, trading around 0.5650 during Asian hours on Wednesday. The pair remains steady following the release of China’s Services Purchasing Managers’ Index (PMI), which unexpectedly rose to 51.4 in February from 51.0 in January, exceeding market expectations of 50.8. Given China’s close trading relationship with New Zealand, any change in the Chinese economy could impact the New Zealand Dollar (NZD).
Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr has resigned, stating that he leaves the role with inflation at target and the economy in a cyclical recovery following COVID-related disruptions. Deputy Governor Christian Hawkesby will serve as acting governor until March 31, after which the New Zealand Finance Minister will appoint a temporary replacement.
The US Dollar (USD) remains under pressure amid concerns over slowing economic growth and the impact of tariffs. President Trump's 25% tariffs on goods from Canada and Mexico took effect on Tuesday, alongside a doubling of duties on Chinese imports to 20%.
US Commerce Secretary Howard Lutnick suggested in a Fox News interview that Trump may reconsider his tariff policy less than 48 hours after its implementation. He noted that if the USMCA rules are followed, relief could be offered. However, *The New York Times* reported that Trump has privately signaled he intends to maintain the tariffs.
The US Dollar Index (DXY), which tracks the Greenback against six major currencies, hovers around 105.70. The USD faces downward pressure as markets speculate that Trump may eventually soften his stance on tariffs.
Economic Indicator
Caixin Services PMI
The Caixin Services Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s services sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for CNY.
Read more.Last release: Wed Mar 05, 2025 01:45
Frequency: Monthly
Actual: 51.4
Consensus: 50.8
Previous: 51
Source: IHS Markit
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