FX.co ★ New Zealand Dollar Holds Gains

The New Zealand dollar steadied around $0.578 on Tuesday, maintaining the gains from the prior session, buoyed by a weakened US dollar. The US currency faced pressure due to looming concerns about a potential federal government shutdown as the October 1 funding deadline approached. This situation heightened the risk of delays in this week's key economic data releases. In China, manufacturing activity saw slight improvement in September, with the PMI showing a minor uptick yet remaining in contraction territory. Meanwhile, the services PMI slipped from modest expansion in August to a neutral stance. These mixed economic indicators provided little support for the New Zealand dollar, given the nation’s substantial trade reliance on China. Domestically, the Kiwi's upward movement was limited by recent underwhelming economic data, such as a contraction in Q2 GDP, which has intensified speculation about further easing by the Reserve Bank. Indeed, markets are largely anticipating a 25 basis point rate cut next week. As a result, the currency is poised for a decline this month.