Ella 
NZD/USD traded lower in Asia on Tuesday. Weaker-than-expected Chinese economic data weighed on NZD/USD. As of press time, the New Zealand dollar/US dollar was trading at 0.6313, down 0.13% on the day.
Data released by China’s National Bureau of Statistics (NBS) on Sunday showed that China’s National Bureau of Statistics manufacturing purchasing managers’ index fell to 49.0 in December from 49.4 last month, lower than the expected value of 49.5. At the same time, the National Bureau of Statistics’ non-manufacturing purchasing managers’ index was 0.4 in December, compared with the previous value of 50.2, which was lower than the expected value of 50.5.
The risk of deflation in China has increased and large-scale fiscal and monetary stimulus will be needed in 2024. The weak economic situation in China may suppress the New Zealand dollar represented by China and become a headwind for the New Zealand dollar/US dollar.
On the other hand, expectations of a rate cut by the Federal Reserve in 2024 may limit the downside for NZD/USD. Markets expect the Fed to begin its easing cycle with a quarter-point rate cut in March, followed by similar cuts in May and June to keep pace with falling inflation.
Next, traders will look to China’s Caixin manufacturing PMI for December, as well as the U.S. S&P Global Manufacturing PMI on Tuesday. On Wednesday, focus will turn to the Fed meeting minutes. The closely watched U.S. non-farm payrolls (NFP) report will be released on Friday. These events will give NZD/USD clear direction.
