Ella 
NZD/USD extended this week’s strong rebound from the 0.5850 area, the lowest level since early November 2023, with gains for the fourth consecutive session on Friday. Spot prices maintained their intraday gains during early European trading and are currently trading around the 0.6025-0.6030 area, just below three-week highs.
Better-than-expected employment data on Wednesday reduced the chances of a rate cut from the Reserve Bank of New Zealand (RBNZ), which continued to support the New Zealand dollar. In addition, stronger-than-expected Chinese inflation data also provided an additional boost to commodity currencies, including the New Zealand dollar, which, coupled with a slight pullback in the US dollar (USD), continued to push NZD/USD higher.
Despite an upbeat U.S. labor market report on Thursday, investors still believe the Federal Reserve (Fed) is likely to cut interest rates by 50 basis points (bps) in September. That, in turn, triggered a fresh decline in U.S. Treasury yields and dragged the dollar away from the weekly peak hit on Thursday. In addition, the positive risk tone also weakened the safe-haven US dollar, prompting capital flows into the risk-sensitive New Zealand dollar.
Meanwhile, the positive trend in NZD/USD may also be attributed to some technical buying above the psychological 0.6000 level. Spot prices remain on track for a second straight week of strong gains as focus now shifts to the crucial Bank of New Zealand interest rate decision and U.S. consumer inflation data, both due on Wednesday. Key central bank event risks and US macro data will provide new directional impetus for spot prices.
