NZD/USD advances on improved Kiwi Building Permits, trades around 0.6020
- NZD/USD gains ground as domestic Building Permits showed a notable increase in February.
- New Zealand’s Building Permits MoM rose by 14.9% in February against the previous decline of 8.6%.
- US ISM Services PMI fell to 51.4 in March from 52.6 in February.
NZD/USD continues its upward momentum for the third consecutive day, reaching near 0.6020 during the Asian session on Thursday. The seasonally adjusted Building Permits (Month-on-Month) data released by Statistics New Zealand showed improvement, with a notable increase of 14.9% in February, rebounding from the previous decline of 8.6%.
However, the Reserve Bank of New Zealand (RBNZ) cautioned that headline inflation remains outside the desired range of 1 to 3%. Investors are eagerly awaiting the RBNZ's policy meeting scheduled for next week. Additionally, investors are expressing concerns over the potential economic impact of a 7.2 magnitude earthquake that struck Taiwan on Wednesday, particularly on the semiconductor supply chain in New Zealand.
The US Dollar (USD) encountered challenges following the release of mixed economic data from the United States (US), consequently, underpinning the NZD/USD pair. In March, the US ADP Employment Change rose by 184,000, surpassing February's increase of 155,000 and exceeding the market consensus of 148,000. However, the US ISM Services PMI declined to 51.4 from 52.6 in February, falling short of the anticipated level of 52.7.
The US Dollar Index (DXY) struggles as Federal Reserve (Fed) Chair Jerome Powell reiterated the central bank's readiness to implement rate cuts, emphasizing a data-dependent approach. Additionally, remarks from Atlanta Fed President Raphael Bostic, advocating for a rate cut in the final quarter of 2024. Furthermore, market participants are expected to closely monitor the release of US Initial Jobless Claims for the week ending on March 29, scheduled for Thursday.