Ella 
The NZD/USD pair failed to capitalize on the modest gains seen during the Asian session and is currently trading around the 0.6175-0.6170 area, just above the two-week low set on Friday.
The US dollar (USD) has gained positive traction on the first day of the new week and continues to build on Friday’s recovery from over one-week lows, which in turn is seen as a headwind for the NZD/USD pair . Mixed U.S. employment data forced investors to scale back expectations for a sharp interest rate cut by the Federal Reserve in September. That led to a slight rise in U.S. Treasury yields, which, along with a softening risk tone, supported the safe-haven dollar.
The closely watched U.S. non-farm payrolls (NFP) data provided further evidence of a sharp deterioration in the labor market, exacerbating concerns about a slowdown in the world’s largest economy. This in turn reduced investor appetite for riskier assets, benefiting traditional safe-haven currencies and curbing sharp gains in the risk-sensitive New Zealand dollar. Meanwhile, markets showed little reaction to China’s latest inflation data released earlier this week.
In fact, China’s overall consumer price index (CPI) in August was 0.4% on a monthly basis and 0.6% on an annual basis, a slight increase from 0.5% in the previous month. However, the figure was below the consensus estimate of 0.7%. Additionally, China’s producer price index (PPI) fell 1.8% year-on-year in the reporting month, compared with a 0.8% decline in July and below market forecasts of -1.4%.
However, it remains to be seen whether the U.S. dollar can continue its efforts amid growing expectations that the Federal Reserve will initiate a rate-cutting cycle at its policy meeting on September 17-18. Furthermore, against the above fundamental backdrop, it would be prudent to wait for strong follow-through selling before positioning for the recent corrective decline that began around the 0.6300 round-figure mark, the highest level since early January hit last month.
