The NZD/USD pair remained confined to a narrow range around 0.5785 during the late Asian session on Wednesday, as traders refrained from taking fresh positions ahead of a data-heavy US trading day. Price action stayed muted with the US Dollar trading broadly steady, keeping the Kiwi capped below the 0.5800 psychological level.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against six major currencies, was trading almost unchanged near 98.55, reflecting a cautious tone across FX markets.
US data in focus as Fed policy expectations hang in the balance
Investor attention is firmly centered on a slate of US macroeconomic releases due later in the North American session. Markets will closely monitor the ADP Employment Change and ISM Services Purchasing Managers’ Index for December, alongside the JOLTS Job Openings report for November.
Employment-related indicators remain particularly important, as they are expected to play a decisive role in shaping expectations for the Federal Reserve’s next policy steps. The ADP report is forecast to show that private-sector employers added 45,000 jobs in December, following a contraction of 32,000 in November. Meanwhile, job openings are seen at 7.64 million, broadly in line with October’s 7.67 million reading.
Any signs of renewed strength in US labor demand could dampen market expectations for additional Fed rate cuts in the near term. The central bank has already delivered 75 basis points of rate reductions in 2025, bringing the policy rate to the 3.50%–3.75% range in an effort to cushion a cooling labor market.
China trade data key for NZD outlook
Beyond US developments, the New Zealand Dollar faces an important external catalyst later this week. China’s Trade Balance data for December, due on Thursday, is expected to influence NZD sentiment, given New Zealand’s heavy reliance on exports to China.
As long as the US Dollar remains steady and traders await clearer signals from both US labor data and Chinese economic indicators, NZD/USD is likely to stay range-bound, with upside momentum limited below the 0.5800 threshold.
Ready to start trading Forex? Join iXBroker today and kick-start your trading journey now!
