Ella 
In early European trading on Friday, NZD/USD continued its gains near 0.6260. The pair closed in the red for a fifth consecutive week, supported by firmer speculation that the Federal Reserve (Fed) will begin easing monetary policy in September. U.S. personal consumption expenditures (PCE) inflation data released on Friday will be in focus.
Data released by the U.S. Bureau of Economic Analysis (BEA) on Thursday showed that the U.S. economic growth rate in the second quarter (Q2) was 3.0%, compared with the initial value of 2.8%. This figure was higher than the 2.8% expected. Meanwhile, in the week ended August 24, initial jobless claims fell to 231,000 from 233,000 the previous week, below consensus expectations of 232,000.
Encouraging U.S. economic data on Thursday provided some support for the dollar. However, upside appears limited as traders expect the U.S. Federal Reserve to lower borrowing costs next month. The interest rate futures market is pricing in a roughly 66% chance of a 25 basis point (bps) rate cut in September, but a 34% chance of a larger rate cut, according to data from the CME FedWatch Tool. %, lower than the 36.5% before the release of US GDP data.
Investors will get more clues from key U.S. inflation data due later on Friday. Any signs of rising inflation in the U.S. economy could dampen hopes for a rate cut by the Federal Reserve in September. This in turn could support the US dollar and limit the upside for NZD/USD. On Thursday, Atlanta Fed President Raphael Bostic said inflation is still some way off. Bostic also said the central bank should wait for more employment and inflation reports before cutting interest rates.
In terms of kiwis, the recent ANZ business outlook survey climbed to the highest level in ten years, boosting the New Zealand dollar. The survey’s business confidence index jumped to 51.0 in August, while an index of expected business activity surged to 37.0, a seven-year high.
