NZD/USD flat-lines below 0.6000, US PMI, Fed’s Powell speech eyed

• NZD/USD remains flat around 0.5994 ahead of the Reserve Bank of New Zealand (RBNZ) rate decision.
• New Zealand’s Building Permits for August came in at -6.7% MoM vs. -5.4% prior.
• The annual Core PCE Price Index grew 3.9% from 4.3% in July, in line with expectations.
• Market players await the US ISM Manufacturing PMI, RBNZ monetary policy meeting.

The NZD/USD pair consolidates below the 0.6000 mark after retracing from the seven-week highs of 0.6048 during the early Asian session on Monday. Traders prefer to wait on the sidelines ahead of the US ISM Manufacturing PMI data and the Reserve Bank of New Zealand (RBNZ) rate decision. The pair currently trades near 0.5996, up 0.05% for the day.

The latest data from Statistics New Zealand on Monday revealed that the nation’s Building Permits for August came in at -6.7% MoM from the previous reading of -5.4%. The Reserve Bank of New Zealand (RBNZ) will announce its interest rate decision on Wednesday, and the Official Cash Rate (OCR) is expected to remain steady at 5.5%. 

Apart from this, economic data released on Saturday showed that the Chinese Caixin/S&P Global Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.6 in September from the previous reading of 51.0, below the market consensus of 51.2. The Service PMI came in at 50.2 from 51.8 in the previous month. These figures indicated a sign of stabilization in the world’s second-largest economy. However, the future is clouded by a housing downturn and plummeting exports, which could weigh on the China-proxy New Zealand Dollar (NZD).

On the US dollar front, the US Bureau of Economic Analysis showed on Friday that the Personal Consumption Expenditures (PCE) Price Index rose by 3.5% YoY in August from 3.4% in July, meeting market estimation. The annual Core PCE Price Index grew 3.9% from 4.3% in July, in line with expectations. On a monthly basis, the PCE Price Index and the Core PCE Price Index rose 0.4% and 0.1% MoM, respectively. Both of these figures came in below the market consensus.

Federal Reserve (Fed) Bank of New York President John Williams said on Friday that the central bank is at or near peak for the federal funds rate while mentioning that the Fed will need a restrictive policy stance for some time to achieve goals. Traders will take cues from the Fed’s Chair Jerome Powell’s speech later in the American session on Monday.

On Saturday, the US Congress passed a bill to prevent a government shutdown and keep the government running for 45 days. The vote extends government funding through November 17.

Market participants will focus on the US ISM Manufacturing PMI for September ahead of the Fed Chair Powell’s speech on Monday. The key event will be the RBNZ Interest Rate Decision on Wednesday. Traders will take cues from these events and find trading opportunities around the NZD/USD pair.