Ella 
In early Asian trading on Tuesday, NZD/USD fluctuated within a narrow range of 0.5895-0.5916. Meanwhile, the U.S. dollar index (DXY) fell below the 104.00 mark. NZD/USD is currently trading around 1.3596, down 0.03% on the day.
At the Jackson Hole symposium, Federal Reserve (Fed) Chairman Jerome Powell said that he could not rule out raising interest rates again if necessary, but that would depend on upcoming economic data. According to World Interest Rate Probability (WIRP), market expectations for a rate hike in September have eased, but the probability of a 25 basis point (bps) hike in November has increased to nearly 70%. In terms of data, the Dallas Fed manufacturing index rose to -17.2 in August from -20 previously, better than the expected -21.6.
On the other hand, China’s Ministry of Finance said that China will cut the stock transaction tax by 0.1% to 0.05% to stimulate the capital market and boost investor confidence. The move by the finance ministry comes as the China Securities Regulatory Commission (CSRC) is taking steps to bolster market confidence in listed companies after China’s stock index fell to a nine-month low. It is worth noting that the positive news surrounding China’s economic situation may boost the NZD, which uses China as a proxy currency, and act as a “tailwind” for the NZD/USD currency pair.
Last week, the Reserve Bank of New Zealand’s (RBNZ) chief economist said policymakers would cut the official cash rate earlier if China’s economy slowed more sharply than the bank expects.
Market participants are awaiting the release of key economic data from the United States. Later in the week, JOLTs job vacancies data, ADP employment change and non-farm payrolls data for July will be released. Additionally, US GDP (Gross Domestic Product), ISM Purchasing Managers Index and Core Personal Consumption Expenditures (PCE) will also be in focus for traders. In addition, New Zealand’s July building permits rate and consumer confidence index will be released on Tuesday and Friday, respectively.
