NZD/USD flat-lines near 0.5940 following New Zealand Retail Sales

• US Existing Home Sales in July were marginally lower than anticipated, Richmond Fed’s Manufacturing Index fell to -7 from -9.
• New Zealand Retail Sales improved to -1.0 versus market expectations of -2.6% and -1.4% prior.
• Investors await US S&P Global PMI data ahead of Jackson Hole symposium

The NZD/USD pair remains flat around 0.5945 during the early Asian session on Wednesday. Markets turn cautious ahead of the Jackson Hole symposium. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, rebounds and holds above 103.60.

On Tuesday, US Existing Home Sales in July were marginally lower than anticipated, coming in at 4.07M compared to 4.15M expected and 4.16M in the previous month. Existing Home Sales Change in the US declined 2.2% in July versus a 3.3% drop in June. Meanwhile, the Richmond Fed Manufacturing Index for August fell to -7 from -9, in line with market expectations.

In addition to the upbeat US data, hawkish comments from Federal Reserve Bank of Richmond President Thomas Barkin support the Dollar’s recovery. Barkin said on Tuesday that monetary policy would need to be tightened if inflation remained elevated and there was no evidence that demand would fall.

On the other hand, the latest data from Statistics New Zealand revealed on Wednesday that the nation’s Retail Sales QoQ for the second quarter improves to -1.0 versus market expectations of -2.6% and -1.4% prior. Apart from the data, the Reserve Bank of New Zealand (RBNZ) Chief Economist stated that the central bank is aware of the decline in the New Zealand Dollar. In addition, policymakers would lower the OCR sooner than we have signaled if China experienced a more significant deceleration than the RBNZ anticipates.

Market players will take cues from China’s developments and market sentiment. the US Commerce Department’s statement reported on late Tuesday that US Commerce Secretary Gina Raimondo met the Chinese ambassador Xie Feng, and had a productive discussion before her departure to China, according to Reuters. However, the renewed tension between the US-China could exert pressure on the Kiwi and acts as a headwind for the NZD/USD pair.

Looking ahead, US S&P Global PMI data will be released later on Wednesday. The key event will be Jackson Hole annual symposium on Thursday and Fed Chair Powell’s speech on Friday. The event will be critical for determining a clear movement for the NZD/USD pair.