Insights 
VT 
US Economic Data and FOMC Speeches
Traders now turn their attention to the US economic docket, which includes the JOLTS Job Openings data and the Consumer Confidence Index. Furthermore, speeches by key FOMC members are anticipated to influence USD demand during the North American session, potentially providing impetus to the NZD/USD pair.
The NBS Non-manufacturing PMI, an indicator of China’s non-manufacturing sector’s business activity, is derived from surveys of senior executives. A PMI reading of 50 signals no change from the previous month, with readings above 50 indicating expansion and values below 50 signalling contraction, impacting the Renminbi (CNY). The significance of this indicator lies in the performance of China’s service sector, which influences the global FX market.
The NZD/USD is finding itself in a tight spot, struggling to decisively break above the 0.5800 level. The mixed economic signals from China are not providing the strong push we need, as the slight improvement in manufacturing is cancelled out by stagnation in the services sector. For the past two quarters of 2025, we’ve seen the 0.5850 level act as a significant ceiling, indicating that a powerful catalyst is needed for a true breakout.
China’s slowing services activity is a concern, as it points to weakening domestic demand that directly impacts New Zealand’s economy. We have to remember that Chinese retail sales figures from August 2025 only grew by 2.5%, missing forecasts and signaling that consumer spending remains fragile. This underlying weakness in New Zealand’s largest trading partner may limit any significant, sustained rally for the Kiwi dollar.
Impact of US Government Shutdown Concerns
On the other side of the pair, the US dollar is facing its own headwinds from a potential government shutdown and growing market expectations for rate cuts. Looking back at the government shutdown in late 2018, we saw a sharp increase in short-term volatility, which suggests we should be prepared for erratic price action. The CME FedWatch Tool is currently pricing in over an 80% probability of a 25-basis-point cut at the November 2025 meeting, which is keeping pressure on the dollar.
This tug-of-war between a soft Kiwi backdrop and a weakening dollar suggests volatility may be underpriced in the coming weeks. We should consider options strategies, like long straddles, that would profit from a significant price move in either direction, regardless of the catalyst. Such a strategy would allow us to take a position on rising uncertainty itself, rather than betting on a specific direction.
All eyes will now be on the upcoming US JOLTS job openings and consumer confidence data for immediate direction. Last month’s JOLTS data in August 2025 showed a surprising drop in job openings, which fueled the narrative of a slowing US economy. Another weak reading this week could solidify expectations for Fed cuts and finally push NZD/USD through the 0.5800 resistance.
